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The Week Ahead – Brexit, Economic Data and Trade in Focus
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It's going to be another choppy week ahead. Chatter on trade, Brexit and the stats will influence risk appetite.
On the Macro
For the Dollar:
It’s a quiet 1st half of the week, with key stats limited to import and export price figures. Barring a material uptick in import prices, the figures will likely have a muted impact on the Dollar.
Through the 2nd half of the week, key stats include retail sales and industrial production figures due on Wednesday and May’s Philly FED manufacturing PMI on Thursday.
Of less influence in the week will be business inventory and housing sector figures due out on Wednesday and Thursday.
At the end of the week, prelim consumer sentiment figures will round off a quieter week. An uptick in consumer sentiment is expected following the CB survey figures released at the end of April.
The Dollar Spot Index ended the week down 0.19% to $97.33.
For the EUR:
Key stats include economic sentiment figures out of Germany and industrial production numbers out of the Eurozone on Tuesday.
Of greater significance will be the release of 1st estimate GDP numbers out of Germany and 2nd estimate GDP numbers due out on Wednesday.
March Trade data due out of the Eurozone will likely have a relatively muted impact on the EUR.
Off less influence will be finalized inflation figures due out of member states and the Eurozone through the week.
The EUR/USD ended the week up 0.31% to $1.1233.
For the Pound:
It’s a quiet week ahead. Key stats are limited to wage growth and unemployment numbers due out on Tuesday. While the focus will be on the claimant count and wage growth figures, any uptick in the unemployment rate would weigh.
Outside of the numbers, Brexit and political chatter from Parliament will continue to be the key driver for the Pound.
The GBP/USD ended the week down 1.33% to $1.2998.
For the Loonie:
It’s a relatively quiet week ahead. Key stats due out of Canada include April inflation figures on Wednesday and manufacturing sales figures on Thursday.
Foreign securities purchases also due out on Thursday will likely have a muted impact on the Loonie.
Outside of the stats, OPEC will release its monthly report on Friday, which will deliver further direction. It may ultimately hinge on the state of U.S – China trade negotiations, however…
The Loonie ended the week up 0.02% to C$1.3417 against the U.S Dollar.
Out of Asia
For the Aussie Dollar:
It’s a particularly busy week ahead. Key drivers for the Aussie Dollar will be consumer and business confidence figures due out on Tuesday and Wednesday, along with wage growth and employment figures due out on Wednesday and Thursday.
Wage growth and strong labor market conditions remain key to delivering a pickup in domestic consumption. Both consumer and business confidence figures will give some insight into the state of affairs early in the week.
Barring a material slide in home loan figures due out on Monday, the numbers will likely be brushed aside.
On the political front, federal elections will be in focus ahead of the Saturday election. A surprise on the cards?
From elsewhere, economic data out of China and progress on U.S – China trade talks, if any, will also be key.
The Aussie Dollar ended the week down 0.23% to $0.7002.
For the Japanese Yen:
It’s a particularly quiet week ahead. Economic data is limited to March current account figures due out on Tuesday.
The numbers will likely be brushed aside by the markets to leave market risk sentiment as the key driver throughout the week.
The Japanese Yen ended the week up 1.04% to ¥109.95 against the U.S Dollar.
For the Kiwi Dollar:
A quiet week ahead leaves the Kiwi Dollar in the hands of the April Business PMI and input price figures due out on Friday.
While we can expect the Kiwi to be responsive, market risk sentiment through the week will ultimately decide its fate.
The Kiwi Dollar ended the week down 0.75% to $0.6597.
Out of China:
April fixed asset investment and industrial production figures due out on Wednesday will be in focus.
With industrial production numbers being the key driver for risk sentiment, how much influence on the day will ultimately be dictated by trade news.
Geo-Politics
U.S – China Trade War: Trump threatens China with even more action in his 2nd term. Of greater impact, however, will be whether Trump acts on his threat to introduce tariffs on what’s left…
Brexit: There’s likely to be plenty of chatter in the week ahead. The Conservative Party fell behind the Brexit Party in the latest general election polls. Theresa May will be looking to wrap up a passable deal. With EU Parliamentary elections 2-weeks away, time is running out.
The Rest
Corporate Earnings: Corporate earnings are on the lighter side in the week ahead. Some of the key releases include those for:
Tuesday, 14th May
- Nissan Motor (Nikkei)
- Allianz AG (DAX)
- Vodafone Group (FTSE)
Wednesday, 15th May
- Mizuho Financial Group (Nikkei)
- Tencent Holdings (HSI)
- ABN AMRO (NA)
- Credit Agricole (CAC)
Friday, 17th May
- Deere & Co (NYSE)
About the Author
Bob Masonauthor
With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.
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