MORNING ROLL CALL

Jun 19 • Morning Roll Call • 171 Views • No Comments

The U.K. begins official Brexit talks, Markit economics publishes Eurozone PMIs, Canada publishes key data

The week starts with a bang on Monday as the U.K. Government finally begins its Brexit negations with its key European opponents, roughly one year (June 23rd 2016) after the UK’s referendum resulted in the vote to leave. The narrative now mainly concerns a hard or soft Brexit, despite the leading E.U. negotiators constantly affirming the UK’s leading Tory politicians that there’s no such definition. Their contention is that once the U.K. leaves and abandons the four principles of free movement, there’s no special concessions available, the U.K. will lose tariff free access and then be subject to WTO rules. We can expect the value of the pound versus all of its peers, especially versus the euro and dollar, to fluctuate considerably over the two year deadline the United Kingdom has been given to leave.

Thereafter, on Monday attention turns to the Eurozone’s construction output, forecast to come in at a monthly figure that will not negatively effect April’s YoY growth figure of 3.6%.

Tuesday witnesses the publication of Australia’s house price index; predicted to come in at 8.9% YoY, shortly after Australia’s central bank the RBA will publish the minutes from its recent rate setting policy meeting, during which it decided to keep interest rates unchanged at 1.5%. German producer prices are also published, they’re predicted to fall to 2.9% for May. The current account balance for Europe will also be revealed. Other prominent high impact news includes the Swiss central bank’s president speaking in Bern and the USA publishing its latest current account first quarter deficit, forecast to come in at -$123.8, a deterioration on the $112.3 recorded in Q4 2016. The day ends with Japan revealing the minutes of the April BOJ meeting.

Wednesday’s significant impact news commences with the BOJ’s Kuroda speaking in Tokyo, then focus moves to the U.K. with four various public sector borrowing figures published, there is little expectation for any improvement in Britain’s finances to be revealed. From the USA we receive the customary data on gasoline and oil reserves, plus the latest figures on existing home sales, predicted to come in at -0.4% for May, beating the -2.3% recorded in April. From New Zealand in late evening we learn of the RBNZ’s latest decision on interest rates. It’s currently at 1.75% and the prediction is for no change.

Thursday at 8:00am, the Eurozone’s latest economic bulletin is published by the ECB. In the afternoon the consumer confidence reading for the Eurozone is published for June, an improvement to -3, from -3.3 is expected. Thursday also sees the publication of the UK’s CBI trends survey; the orders reading is expected to fall to 7 from 9, whilst the selling prices are forecast to fall to 20, from 23. Attention then shifts to the USA data; weekly jobless claims are predicted to rise to 240k, May’s USA house price index is forecast to fall by 0.1%, to 0.5% and the leading indicators reading is expected to rise to 0.4, from 0.3 in April.

Friday witnesses a raft of Eurozone Markit Economics PMI data published, the headline readings from the nine various readings are: Germany’s service and composite and the Eurozone’s manufacturing, services and composite. Most readings are predicted to remain close to unchanged for May. French GDP for the first Q of 2017 is forecast to come in at 0.4%. Focus then shifts to North America; Canada’s various inflation data is published at midday Friday, CPI is predicted to come in at 1.5% YoY, down from 1.6%. Then we move onto USA data; Markit’s manufacturing, services and composite PMIs are published, all three are predicted to show modest improvement. New home sales for May are predicted to improve to 4.2%, from a surprising collapse of -11.4% in April.

ECONOMIC CALENDAR (all times are London BST time)

Monday, 19 June
00:01 – Rightmove UK house price index
00:50 – Japan trade balance, exports, imports

Tuesday, 20 June
02:30 – Australia house price index, RBA monetary policy meeting minutes
07:00 – German PPI inflation
13:30 – Canada wholesale sales
13:30 – US current account Q1

Wednesday, 21 June
00:50 – Bank of Japan monetary policy meeting minutes
05:30 – Japan all industries activity
09:30 – UK public sector net borrowing
15:00 – US existing home sales
15:30 – US crude oil inventories
21:00 – RBNZ interest rate statement
22:00 – RBNZ official cash rate

Thursday, 22 June
09:00 – ECB economic bulletin
10:00 – Italian retail sales
13:30 – Canada retail sales, core retail sales
13:30 – US weekly unemployment claims

Friday, 23 June
01:30 – Japan flash manufacturing PMI
08:00 – French flash manufacturing & services PMI
08:30 – German flash manufacturing & services PMI
09:00 – Eurozone flash manufacturing & services PMI
13:30 – Canada CPI inflation figures
14:45 – US flash manufacturing & services PMI
15:00 – US new home sales

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