Week Ahead - 11th December 2017
Brexit continued to dominate the headlines over the weekend, as Theresa May seems optimistic that the EU will allow the UK to move talks onto trade, after last minute talks last week. The EU will be deciding at the EU summit on Thursday, whether enough has been done by the UK to move the talks onto trade. In order to satisfy Ireland, the UK has agreed to maintain its ruling alignment with the EU, helping avoid the need for a hard border. However, Brexit Secretary David Davis shared concerns over the weekend, the UK aren’t committed to the rushed Ireland deal, stating it was ‘more a statement of intent than it was legally enforceable.’
Today will be a very quiet start to the week with no high tier data on the economic docket. The US will be releasing the JOLTS job openings figure, expected to drop slightly from last month’s to 6.03m.
The UK will be the focus of Tuesday morning as the CPI figure is set to be released. The figure is expected to drop from last month’s 3.1% to 3%. The UK will also be releasing the PPI input figure and RPI figure, expected to post 1.6% and 4.1%. In the Eurozone, the German ZEW economic sentiment will be released, expected to post 17.9. ECB President, Mario Draghi will be speaking at the 2017 European Cultural Days Closing Concert, which is hosted by the ECB. Across the pond, the US will be releasing their PPI figure, expected to remain at 0.4%.
Wednesday will start with the release of UK labour data. The average earning index is forecasted to post a bullish 2.5%, whilst the unemployment rate is expected to remain at a 42 year low. The claimant count change is also expected to post a bullish 0.4k. Across the pond, the Fed are expected to raise interest rates for the third time this year, to 1.5%. However, inflation figure is still expected to register below target, with it forecasted to remain at 1.8%. The markets will be closely watching the Fed press conference for any hints of the speed of rate hikes over the next year. The day will end with FOMC member, Lael Brainard delivering the opening remarks at an award ceremony hosted by the Federal Reserve Bank of New York.
Thursday is set to be a busy day, with both the ECB and Bank of England hosting press conference following from their latest meetings. In the Eurozone, the flash manufacturing and services PMIs will be released, expected to post 59.8 and 56.1. The biggest economy within the Eurozone, Germany, will be posting their individual versions of the two PMIs, forecasted at 62.2 and 54.7. At the ECB press conference, Mario Draghi is not expected to announce a rate hike, so the markets will be focusing on the plans for next year, when quantitative easing is set to start taking place. Back in the UK, the retail sales figure is expected to grow from last month’s 0.3% to 0.4%. The BOE are expected to keep interest rates on hold, after raising them for the first time in a decade last month. Across the pond, the US will be releasing their core retail sales figure expected to post 0.7%, as well as their weekly unemployment claims.
A quiet end to the week, as the markets continue to digest the week’s central bank meetings. The BOE Chief Economist Andy Haldane will be speaking at the International Rome Conference on Money, Banking and Finance.