The week ahead: Brexit talks set to continue
There is a big week ahead for the UK as Brexit talks are set to continue. Theresa May is heading to Brussels today to have lunch with the European Commission President, Jean-Claude Juncker.
Today is especially important for the UK, as it is the deadline for the UK to provide what Barnier called “absolutely vital” clarifications on the financial commitments it will offer the EU, in order to move onto the trade talks.
December will be a crucial month for both the EU and UK. The 14th December sees the next EU Summit where the progress thus far will be evaluated and a decision will be made as to whether enough progress has been made to continue.
There is a quiet start to the week today, with only one piece of high tier data on the economic docket. This comes in the form of the UK Construction PMI estimated at 51.2, which if met or exceeded will indicate industry expansion. In the Eurozone today the Eurogroup meetings will be taking place where a range of financial issues and government finances will be discussed. Across the pond, the US will post their Monthly Factory Orders.
Australia are set to release their Retails Sales figure, estimated at 0.3% along with the announcement of their Bank Rate statement on Tuesday. The Head of the Central Bank of New Zealand will also be delivering a speech titled “Low Inflation and its implications for monetary policy”. Canada will release their Trade Balance figure which highlights the amount of imported and exported goods from the previous month, predicted at -.2.3B. The UK releases the second PMI figure in the form of Services, forecasted at 55.2. The US is set to release their ISM Non- Manufacturing PMI, predicted at 59.2.
Wednesday sees a quiet day in the UK and Eurozone. However, Australia will be releasing its last GDP for the year, forecasted at 0.7%. Across the pond, the US have their ADP Non–Farm Employment Change expected at 191K along with their weekly Crude Oil Inventories. In Canada, the BOC will release its interest rate statement and overnight bank rate. Further are the key interest rates expected at 1.00%.
Thursday is a quiet day in terms of high tier data. However, Australia are due to announce their Trade Balance figure, expected at 1.41B. The US Unemployment Claims figure will be released, predicted at 241K which is up from the previous result. The Unemployment Claims figure is a good indicator of the current health of the economy. In the Eurozone, the European Central Bank president, Mario Draghi, will be holding a press conference at the Bank for International Settlements in Frankfurt. Depending on what topics are discussed, there could be some volatility.
The UK releases the monthly Manufacturing Production figure, predicated at -0.1% on Friday. If the figure has increased, Sterling should get a boost just before markets close for the week.
Across the pond in the US, we should see on Friday the Average Hour Earnings at 0.3%, Non-Employment Change at 200K and Unemployment Rate at 4.1%. If the US fall short of these predictions, Sterling should see a boost.