UK: A new Prime Minister
At this point, it seems like a foregone conclusion that Boris Johnson will be Prime Minister by the end of Wednesday. However, there is also the chance of an upset, so the pound could be tense ahead of the results on Tuesday morning.
Once the new Tory leader is confirmed, the currency will be sensitive to whatever Brexit movements they start to make in their first days in charge. Sterling has had a terrible time of it this year, repeatedly striking 27-month and 6-month lows against the dollar and euro respectively on increased fears of a no deal Brexit. Considering the candidates’ positions on the matter, this change at the top is unlikely to help.
It is lucky the UK has this political shift to deal with this week, given that data-wise it has little to offer. The CBI industrial order expectations reading arrives on Tuesday, with the high street lending numbers on Wednesday and the CBI realised sales figures on Thursday.
What the calendar lacks in data it more than makes up for in corporate updates. PZ Cussons and FeverTree report on Tuesday. Britvic, ITV, GlaxoSmithKline, Marston’s, Croda International, Antofagasta and Brewin Dolphin are on Wednesday. AstraZeneca, Diageo, Compass Group, Daily Mail & General Trust, National Express Group, Unilever, Fuller Smith & Turner and Anglo American complete a mega Thursday. Finally things end with Vodafone on Friday.
US: Foreign affairs and rate cuts
US and Iran, US and China, a potential Fed rate cut: all three macro-movers have the ability to dominate the discourse this week, each story unresolved and in varying states of uncertainty (for the Fed it is more a case of how deep the cut will be, rather than if it will happen).
Even without those headline draws, the US has a decent smattering of data. The existing homes sales figures on Tuesday, the flash PMIs on Wednesday and the durable goods orders on Thursday are all preludes to Friday’s advance GDP reading, the first glimpse at how the country performed in Q2.
Like the UK, the US has a helluva earnings calendar this week. Visa and Coca-Cola vie for attention on Tuesday, Facebook, Tesla and a troubled Boeing report on Wednesday, while Thursday sees juggernauts Amazon and Alphabet joined by Starbucks and Intel. Twitter then tweets out its latest figures on Friday,
Eurozone: Performance data and rate cuts
The Eurozone’s week doesn’t really get started until Wednesday, with the release of the region’s flash manufacturing and services PMIs. Thursday then sees the German Ifo business climate reading followed by the month’s ECB meeting. There is a growing feeling that the central bank will cut interest rates in September, so investors will be on high alert from any comments signalling as such from Mario Draghi.
After its recent radical restructuring reveal, Deutsche Bank posts its latest results on Wednesday, joined by Mercedes-Benz-parent Daimler. The automotive industry then gets its second big update of the week on Thursday, as Volkswagen unveils its recent performance.
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