Theresa May faces MP questions over Syria airstrike
UK Prime Minister Theresa May, is set to come under pressure this morning as she faces questions from MPs about the UK’s involvement in the Syrian airstrikes over the weekend. May’s decision for the UK to join the US and France in airstrikes without MPs’ backing has been criticised by opposition leader, Jeremy Corbyn. Markets around the world will be looking for any further developments or commentary around this.
Oil rose to its highest level since 2014 over the weekend, as fears of military action built up. After reaching just above $72 per barrel, it slid below the $70 mark. If oil prices were to rise, inflation could also rise as a result in the mid-term.
The US Monthly Retail Sales figure is the only top tier data set for release today. An increase is expected which would show US consumer confidence in spending is returning.
UK Labour Data comes under the microscope with several job data releases on Tuesday. Markets are anticipating that both the Claimant Count and Unemployment Rate figures will be unchanged and post the same as last months. Average Earnings in the UK is the most important indicator for the BoE, as earnings is due to increase to 3% and come in above inflation, which could mean another rate increase could be seen in May. In the afternoon, US Building Permits and Housing Starts are both set to show a slight increase. However, a decline on the monthly Industrial Production figure is expected.
A big indicator as to whether another rate rise will be agreed on the 10th May by the Bank of England is the release of the Inflation gauge, due to remain anchored at 2.7%. If posted at 2.7% or above, it is almost certain that MPC members will pull the trigger to raise rates again this year. This could see Sterling push higher again as a result. However, if inflation does drop it is expected that the current Monetary Policy Programme will remain on its current course. Also from the Eurozone the inflation figure is due to also remain constant at 1.4%.
The only notable data released on Thursday is the UK Monthly Retail Sales. Last months figure posted at 0.8%. However, this months sales are expected to show a drop of around -0.5% which could indicate that UK consumers are curbing their spending in the wake of rates possibly increasing again.
No high tier data is set to be released on Friday. The International Monetary Fund meeting kicks off its two day meeting which could cause some market volatility if any relevant comments are made or aired.