Once again, this week hosts a number of key economic indicators mixed with ongoing Brexit related headlines as well as the continuing Italian budget drama. PM May’s time to strike a deal is rapidly declining, each week that passes ensures more pressure is built on the weak PM’s shoulders. After another government resignation last week, speculation is on the rise that even if she can bring a deal home it will be convincingly voted down in Parliament. This week will no doubt offer some new developments for participants to contend with.
On the data front it’s a very busy week from the UK’s perspective. We are back to having 3 tier 1 economic reports all released across consecutive days. Tuesday sees employment numbers which have been impressive of late. Wednesday will host the latest set of inflation data while Thursday offers another retail sales report following some previously impressive readings. A very interesting week for the pound ahead. This all comes as the currency has seen a gap lower as markets reopened yesterday evening. At the time of writing sterling has just breached the $1.29 level and is now firmly trading in the $1.28s. This move has been exacerbated by EURUSD’s early morning break through big support at $1.13, the pair now trades at the lowest levels since June 2017.
Elsewhere it’s a big week for the US as the dust settles from last week’s mid-term elections. Will Trump’s weakened position significantly prevent him from perusing his economic policies? Data-wise, inflation and retail sales will be at the top of the agenda. There’ll also be a few Fed speakers on the wire this week – Jay Powell will be the headliner with 2 speeches across these next few days.
Written by Vivek Savani. 11:37am, November 12th 2018
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