Week Ahead: Focus on UK Brexit Vote and Earning Season
January 14, 2019 1:41 pm
This week, traders will continue to look at the United States, which has seen a partial government shutdown go on for more than three weeks. This makes it the longest shut down in history. It has been caused by the disagreements between the legislative and executive arms of the US government on border wall funding. This week, investors will pay close attention to the US. Most importantly, they will watch closely whether any of the big three ratings agency will downgrade US bonds. Just last week, Fitch announced that it was likely to downgrade the AAA US bonds if the shutdown continues. Such a move would be disastrous for the market.
Attention will also turn to the United Kingdom where members of parliament will have a vote on Theresa May’s Brexit proposal. This was a vote that was scheduled to happen in December but was postponed because of its unpopularity. Today, Theresa May will address the members of parliament and caution them on the dangers of voting against the bill. The European Union too will try to salvage the deal, with Jean-Claude Juncker expected to reassure Eurosceptic parliamentarians on the backstop issue. At the current prices, investors are pricing for a breakthrough in the vote or a delay of the March deadline.
Traders will also be focusing on UK data. On Wednesday, the UK will release the inflation numbers. The headline CPI is expected to rise by 2.2%, which will be lower than the expected 2.3%. On a MoM basis, the CPI is expected to remain unchanged. The core CPI, which strips the volatile food and energy prices, is expected to remain unchanged at 1.8%. The PPI data is expected to show that input rose by 3.5% while output increased by 2.9%. On Friday, the retail sales are expected to show an increase of 3.4%, down from 3.6% in the previous month. The core retail sales are expected to show an increase of 3.8%, in line with the previous month.
Another big issue this week will be earnings. The season will start today with the release of key numbers from Citi, Bank of America, JP Morgan, and Wells Fargo. Later in the week, companies like Goldman Sachs and Netflix will report. This week’s earnings numbers will be closely watched because of the ongoing issues in the market, which is expecting growth to slow down. Signs that growth is slowing down will reverberate across the market, which will likely show some weakness.
There will be other key data this week. Tomorrow, the market will receive CPI numbers from countries like Spain and France. South Africa will report the mining production in December. On Wednesday, the US will release the retail sales and trade data. Crude oil inventories data will also be released by API and EIA. On Thursday, China will release its first reading of Q4 GDP while the EU and US will release inflation numbers and building permits respectively.
This week, traders will continue
to look at the United States, which has seen a partial government shutdown go
on for more than three weeks. This makes it the longest shut down in history.
It has been caused by the disagreements between the legislative and executive
arms of the US government on border wall funding. This week, investors will pay
close attention to the US. Most importantly, they will watch closely whether any
of the big three ratings agency will downgrade US bonds. Just last week, Fitch
announced that it was likely to downgrade the AAA US bonds if the shutdown
continues. Such a move would be disastrous for the market.
Attention will also turn to the
United Kingdom where members of parliament will have a vote on Theresa May’s
Brexit proposal. This was a vote that was scheduled to happen in December but
was postponed because of its unpopularity. Today, Theresa May will address the
members of parliament and caution them on the dangers of voting against the
bill. The European Union too will try to salvage the deal, with Jean-Claude
Juncker expected to reassure Eurosceptic parliamentarians on the backstop
issue. At the current prices, investors are pricing for a breakthrough in the
vote or a delay of the March deadline.
Traders will also be focusing on
UK data. On Wednesday, the UK will release the inflation numbers. The headline
CPI is expected to rise by 2.2%, which will be lower than the expected 2.3%. On
a MoM basis, the CPI is expected to remain unchanged. The core CPI, which
strips the volatile food and energy prices, is expected to remain unchanged at
1.8%. The PPI data is expected to show that input rose by 3.5% while output
increased by 2.9%. On Friday, the retail sales are expected to show an increase
of 3.4%, down from 3.6% in the previous month. The core retail sales are
expected to show an increase of 3.8%, in line with the previous month.
Another big issue this week will
be earnings. The season will start today with the release of key numbers from
Citi, Bank of America, JP Morgan, and Wells Fargo. Later in the week, companies
like Goldman Sachs and Netflix will report. This week’s earnings numbers will
be closely watched because of the ongoing issues in the market, which is
expecting growth to slow down. Signs that growth is slowing down will
reverberate across the market, which will likely show some weakness.
There will be other key data this
week. Tomorrow, the market will receive CPI numbers from countries like Spain
and France. South Africa will report the mining production in December. On
Wednesday, the US will release the retail sales and trade data. Crude oil
inventories data will also be released by API and EIA. On Thursday, China will
release its first reading of Q4 GDP while the EU and US will release inflation
numbers and building permits respectively.
The post Week Ahead: Focus on UK Brexit Vote and Earning Season appeared first on Forex.Info.
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