The political situation in the UK and the progress of ‘phase one’ of the US-China trade deal dominate a PMI-filled economic calendar.
UK: Pound awaits December election
Since its confirmation, the pound has been completely undaunted by the prospect of December’s election. The currency is seemingly working on the assumptions that a) the chances of a no-deal Brexit are currently low, even if Michel Barnier insists it is still a possibility, and b) that this trip to the ballot box will yield clarity not chaos.
At present, Spreadex’s prices have the Tories getting 320-328 seats, against 317 in 2017, followed by Labour on 205-213, the SNP on 47-50, and the Liberal Democrats on 44-49. Of course the volatile political climate we find ourselves in, alongside the example set in the last few years, makes it hard to know how much to trust current polling etc. Any changes in the perceived fortunes of each party, then, could be felt by sterling as the week progresses.
As for data, the construction and services PMIs are out on Monday and Tuesday respectively, following last Friday’s better than forecast manufacturing reading. There’s also the Bank of England’s latest monetary policy statement and Mark Carney appearance on Thursday, one of the few meetings the Canadian has left before he departs at the end of January.
UK: Stocks to watch
The corporate calendar sees a decent run of big names reporting, including Primark-owner Associated British Foods, Morrisons and Intu Properties on Tuesday, Croda International on Wednesday and 3i Infrastructure, Halfords, Sainsbury’s and Purplebricks on Thursday.
US: Phase 1 of China trade deal
November is meant to be the month that sees ‘phase one’ of the trade deal between US and China signed by Presidents Trump and Xi. However, there have been reports suggesting any deal won’t really get beyond this opening stage, something that spooked the markets on Halloween. As ever, the Dow Jones et al. will be primed to react to any trade updates from Washington and Beijing.
Beyond that, it’s not the most exciting week for US data. The factory orders arrive on Monday, followed by the services PMIs on Tuesday, unemployment claims on Thursday and the preliminary UoM consumer sentiment figures on Friday.
Eurozone: Can data alleviate investor concerns?
The good stuff is at the start of the week for the Eurozone, with Monday’s manufacturing and Tuesday’s services PMIs a recent cause for concern for investors
After that there are the EU economic forecasts on Thursday, and the German and French trade balance readings on Friday.
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