Last week was probably the biggest week of the year on financial markets with Trump winning the US Presidential Election, the Bank of England cutting rates by 25 bps and the Fed also cutting rates by 25 bps. The aftermath of these events has resulted in a strong Dollar, strong Pound and a weak Euro- this was also heavily contributed by the issues with Germany’s government. The BoE is now not expected to cut rates until February where as the Fed will look to cut rates again in December. However, a Trump Presidency will be strong for the US Dollar as it was in his previous term due to potential tariffs being placed on other countries, so this will be worth keeping in mind over the next couple of years during his term.
This week I am actually out of the office until Thursday, so for any quotes please contact [email protected] – but as I do not have my flight until Monday morning, there was still time to give you an overview of what is expected on the markets this week.
Monday is a relatively quiet day as it is Veterans Day/Armistice Day, so the real releases begin on Tuesday- with UK employment numbers being released at 7am- the UK job market is currently in focus given the BoE and UK Government’s latest moves in both monetary and fiscal policy- any negative change will hit the Pound hard, however leading up to Christmas we usually find that the job market gets stronger with part time work increasing.
On Wednesday we have US inflation data where we are expecting CPI to stay at 3.3%- there is now a chance we see inflation rise slightly over coming months, so I do not believe the Fed will be watching this number as closely anymore and focusing more on the jobs market, so I do not expect this to be an eventual release.
On Thursday we have both Europe employment and US employment data which should add some volatility in markets, we also have some Fed and BoE speeches sprinkled in, however with recent forward guidance, we are not expecting any shocks in these speeches that would move the market.
On Friday we have industrial and manufacturing production data out of the UK and the US, and more importantly, GDP numbers out of the UK, the GDP numbers are most important, any indication that growth has slowed down in the UK would weaken the Pound considerably.