This week sees investors focus on the UK’s GDP and political drama as Parliament is suspended, a European monetary stimulus package and the US economy
UK: Good news for the Pound?
The Benn bill – requiring the government to ask Brussels for a 3-month Brexit extension if it fails to either reach a deal with the EU or gain parliamentary approval for no-deal by October 19th – could receive royal assent as soon as Monday, just before Parliament is suspended.
That, in theory, is good news for the pound, given how it reduces the likelihood of a no-deal Brexit. However, once it is passed, attentions will turn to a potential general election, with another vote on the matter also set for Monday.
As for the economic calendar, it is a front-weighted week. Investors will be looking for further signs of a recession on Monday following the release of the monthly GDP reading – which last came in at 0.0% – alongside the manufacturing and industrial production figures. Tuesday then sees the latest jobs report, where the big question will be whether or not wage growth, which currently sits at 3.7% including bonuses, can keep climbing.
UK: Stocks to watch
If you can tear yourself away from the country’s political mess, then there’s Associated British Food updating investors on Monday; Ashtead Group and Bovis Homes on Tuesday; Galliford Try on Wednesday; Morrisons on Thursday; and Wetherspoons on Friday.
Eurozone: ECB to announce stimulus package
Though there is a decent trickle of data for the Eurozone to deal with, the undoubted focus for the region this week is Thursday’s ECB monetary statement and subsequent press conference. The expectation is that the central bank will announce a stimulus package including both a rate cut and the restarting of its asset purchase programme.
US: Health of the economy
Bar any further trade war developments – the two sides are set for talks in Washington in October – the US is looking at a fairly middling economic calendar this week. Tuesday sees the JOLTS job openings, Wednesday the PPI readings, Thursday the inflation figures and Friday the latest retail sales estimates.
Of those numbers, Thursday’s CPI readings have the most potential. The end of September sees the next Federal Reserve meeting, and with it speculation of a second consecutive rate cut. That means investors will be curious to see the state of the country’s inflation data.
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