Most Global Indices retreated last week. A combination of little US Economic Data and uncertainty regarding Tax Reform sent most Investors to safe havens. In the 4 years of leadership under Janet Yellen, the Unemployment Rate has moved from nearly 7% to a generational low of just over 4%.
The Euro rose against the Dollar during the Wall Street Session Friday, as the disappointment that a landmark US Tax Overhaul may be delayed until 2019. The Canadian Dollar strengthened following the recent rise in Oil Prices and a weakening of the Dollar. The Australian Dollar declined after the Reserve Bank of Australia downgraded forecasts for Inflation and Growth, signalling that Interest Rates will remain steady.
The UK Industrial Output rose sequentially in September. Meanwhile, the EU Chief Negotiator on Brexit has indicated that the UK has two weeks to show the EU that sufficient progress has been made on the round of talks so far, for talks to move onto Britain’s future relationship with the Bloc. However, Theresa May has warned she will not ‘tolerate’ attempts to derail the UK’s exit from the European Union, as the Government spelled out the precise hour of Britain’s departure from the Bloc.
The Irish border question has also thrown an unexpected hurdle in the way of a Brexit breakthrough. A memo emerged late Thursday that showed the EU is pushing for the rules of the Customs Union and Single Market to endure in Northern Ireland after Brexit. Ireland backed the document, and called for “strong and tangible commitments” from the UK.
Sterling edged higher against the Dollar on Friday, thanks to the British Industry Data and rising confidence in the progress of Brexit talks.
Potential Catalysts This Week
It’s a very light week for the economic calendar. JOLTS Data on Tuesday will update job openings which have been far exceeding hirings in strong evidence that the US Economy is at full employment.
Janet Yellen, Outgoing Chair of the Federal Reserve is slated to speak on a European Central Bank panel alongside ECB President Mario Draghi, Bank of Japan Governor Haruhiko Kuroda and Bank of England’s Mark Carney, on Tuesday.
New Loans, Retail Sales, Industrial Production and FDI Data from China. UK Inflation Report, EuroZone GDP report, UK Unemployment Report, Canada Inflation Report, US Retail Sales and Consumer Price Inflation Report this week.
President Trump and Secretary of State Rex Tillerson will participate in the US-ASEAN Summit in the Philippines on Monday next week.
We also expect unscheduled Brexit commentaries, Developments from the Middle East, Catalonia and North Korea to keep influencing the markets.