The UK election is increasingly in focus as December begins, while the new month also brings the latest nonfarm jobs report.
UK: Sterling eyes the latest polls
As we move closer to the date of the general election – now less than two weeks away – the pound has, unsurprisingly, become more and more sensitive to the latest polls and surveys. Currently the Conservatives are facing a majority somewhere between 68 and 80 seats, a result that would, presumably, see the UK leave the EU on January 31st (or not long after).
So far this has provided to a boost sterling, which is chasing an end to uncertainty, even if it leads to a not particularly promising version of Brexit. Any change in the Conservative lead – and there is evidence it is shrinking – will likely be the primary mover for the currency this week.
Elsewhere the start of a new month brings with it the usual burst of PMIs, with the manufacturing, construction and services readings released between Monday and Wednesday. The pound was upset by the most recent manufacturing data, so it will warily approach the latest figures.
US: Are we close to a deal?
Though the truth of the matter is still pretty impenetrable, there has been a notable shift in the rhetoric around ‘phase one’ of the US-China trade deal, with phrases like ‘final throes’, ‘very close’ and ‘millimeters away’ all implying an agreement should be forthcoming. That is as long as Donald Trump’s recent signing of the Hong Kong protestors bill hasn’t completely soured the relationship between the two superpowers.
The Dow Jones et al. have broadly been resistant to data at the moment, almost solely preoccupied with the trade deal confusion. Nevertheless the first week of December provides American investors with plenty to dig into, including the Chinese and US manufacturing PMIs on Monday, the latter’s services PMIs on Wednesday, and the latest nonfarm jobs report on Friday.
Eurozone: Indices closely following US-China situation
For some time now the Eurozone indices have been closely following the US-China situation more than any local issues. It is hard to see that changing this week, though Monday’s manufacturing PMIs – a recent sore spot for the region – could break through. Beyond that there’re the services PMIs on Wednesday and Eurozone-wide retail sales on Thursday.
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