Economic calendar: Key week for May and the UK

Summary:

  • Swedish inflation the most important reading for today

  • Brexit vote will take place tomorrow in the UK parliament

  • Wall Street earnings season kicks off

It’s all about the United Kingdom this week as Prime Minister Theresa May will try to convince lawmakers to back her Brexit deal to deliver what Britons voted for. However, before this vote takes place on Tuesday it is worth noting into the Monday’s calendar with Swedish inflation being a cherry on top. This release will come out at 8:30 am GMT with expectations suggesting neither a fall nor a decline in December compared to November’s values. Thus, headline CPI is expected to have steadied at 2% and core CPI at 2.1% in annual terms.

On top of that, we will be offered November’s industrial production data (10:00 am GMT) from the Eurozone which seems to be a particularly crucial reading given a batch of huge disappointments we got from various countries including Germany. In monthly terms it is slated to have dipped 1.5% after a slight 0.2% rise in October. In turn from Poland we will get November’s current account data (1:00 pm GMT).

What to watch beyond Monday?

A decisive week for the United Kingdom has finally begun. The UK parliament will hold a vote on the Brexit deal proposal on Tuesday and the ballot may shape outlook for the British assets for the next couple of years. Apart from that, investors will closely watch US stocks as earnings season launches on Monday. Number of reports from the US economy rounds up the calendar although release of some is threatened by the ongoing government shutdown.

Brexit vote in the UK parliament (Tuesday evening): Theresa May will face a final showdown on Tuesday when British lawmakers will vote on the Brexit deal she worked out with the European Union. However, odds ahead of the event do not bode well for the Prime Minister to say the least. Recent analysis conducted by the BBC suggested that as much as two-thirds of the MPs may vote against the agreement. Tremendous defeat May is likely to suffer will pave the way towards the chaotic Brexit as the EU has already warned that the current deal would not be subject to any further negotiations. Still, there are hopes that a deadline for leaving the EU will be extended.

Wall Street earnings season (whole week): Trade tensions, monetary policy concerns and domestic political issues are factors that currently play a vital role for the US stock market sentiment. However, amid all these macroeconomic and geopolitical ups and downs it is easy to forget about one of the most crucial events relating to the stock market - the earnings season. Citigroup will launch the marathon on Monday when it submits its financial report before session opens. Other major banks, including JPMorgan and Goldman Sachs, will submit theirs in the following days. Market consensus expects the fifth consecutive quarter of solid double-digit earnings growth led by the energy sector.

Data from the United States (PPI inflation - Tuesday, retail sales - Wednesday, housing market data and jobless claims - Thursday, UoM sentiment - Friday): A range of the US data is scheduled for release throughout the week ahead. While there are no major readings like NFP report or CPI inflation, a number of semi-important prints may offer a good update on the US economy at the time when the Federal Reserve is likely to ease its monetary tightening efforts. However, as no solution was found to the ongoing US government shutdown some publications may be postponed until funding is restored. This applies to housing market data and the most important print from the data pack - retail sales.

The GBPUSD saw a breakout last week suggesting that the price could continue climbing even toward 1.3340. However, the burdensome Brexit topic could weigh on the pound. Source: xStation5
GBP jumps on Merkel comments; Stocks pullback
GBPUSD soars as Merkel hints at backstop solution
US stocks near key resistance; Yields gain on George's comments
Market Alert: Will Jackson Hole summit spoil market sentiment?
Eurozone data remains weak despite topping estimates
When performing transactions in the OTC Forex market, the possibility of making a profit is inextricably linked with the risk of losses.