Key events and releases

The Brexit situation heat up more next week as PM May looks for the passing of her Brexit deal once again on Tuesday. If that is not passed, there will be another vote on Wednesday on a no-deal (which would not pass). That will lead to a vote on Thursday for an extension of Article 50.

The focus will then turn to how long of an extension. The expectations is it would be for a short period (i.e. to before the May European elections).

As if that was not enough, the UK Chancellor will present the Spring Statement. Within the statement will be projections for grouwth and inflation. Growth is likely to be lowered in 2019 and 2020 from 1.6% and 1.5%. CPI in 2019 is also expected to be lowered from 2.0% with 2020 remaining at the target of 2.0%. The statement will be made on Wednesday.

On the economic calendar next week

  • US retail sales will be released on Monday w/ expectations of -0.1% vs -1.2% last month. Ex Auto is est at +0.2%. Ex Auto and gas +0.6%. The control group is expected to rise 0.6% vs -1.7% last month
  • Feds Powell will speak on Monday at 7 PM ET. Powell will also be on 60 Minutes on Sunday night. What he says may cause some ripples at the start of the week.
  • UK GDP for Janaury will be released on Tuesday with the expectations for 0.2% vs -0.4% last month
  • UK Manufacturing production will also be releaseon Tuesday with expectations of +0.2% vs -0.7% last month
  • US CPI will be released at 8:30 AM ET on Tuesday with the expectation for 0.2% MoM an 1.6% YoY. Ex food and energy is expected to come in at 0.2% and 2.2% respectively.
  • US durable goods orders for January will be released on Wednesday at 8:30 AM ET with the expectations for -0.5%. Ex Trans is expected at +0.1%. Cap goods orders non defense ex air is expected to fall -0.1%
  • US PPI will also be released on Wednesday with headline MoM expected to rise 0.2% and YoY to come in at 1.9%. The Ex food and energy are forecast to come in at 0.2% and 2.6% respectively.
  • ON Thursday, the BOJ is expected to keep rates unchanged. Kuroda speaks as well and focus will be on whether he signals the potential for more easing due to lower growth and inflation expectations.