Mid-week report Report 24th - 27th August
Good afternoon everyone,
In a very light week for economic data, we do have some top-tier data releases to focus on. The day kicks off with several Euro zone PMI's. These will actually provide a first look at sentiment in the bloc for Q4 growth. Last months data for Germany will be interesting given last month’s unexpected drop in export expectations. Another drop would put pressure on the Euro.
US PMI survey results for October (14:45 BST), while not the most watched sentiment gauge for the country, are a timely indicator. Recent levels for both services and manufacturing have been elevated, and this month’s readings are not expected to change this.
Finally, the Bank of Canada is expected to raise its base rate to 1.75% (15:00 BST). Such an outcome is already well ‘priced in’ by markets, following recent inflation readings and the reduction in trade-related uncertainty.
Brexit News (& politics)
The EU will offer May a U.K.-wide customs union as a way around the Irish backstop issue, but it will have to be negotiated beyond the withdrawal agreement as a separate treaty, RTE reported on Tuesday. The report sent the pound higher.
May’s Brexit plan could leave Britain in a multi-year transition period despite her promise it will last a few months, The Times reports, citing leaked cabinet papers.
Dissent within the Tory party on PM May’s Brexit proposals remains front and center. Any indications of the number of letters of dissent that have been sent to the Chairman of the 1922 Committee will be closely watched. There is little certainty on this front, with reports suggesting that supporters of the PM may have posted disingenuous letters to be kept ‘in the know’ in case the number nears the critical 48 level.
May faces questions from lawmakers in Parliament before addressing the private meeting of Tory back benchers about her Brexit negotiations.