Politics dominated news flow last week with the US escalating political tensions with China, Russia and Turkey. Investors will be keeping a close eye on how these political developments progress this week. Politics aside, it is also a busy week for economic data with a number of important data releases from the UK, US and China.
Following the last week’s busy schedule of economic data releases and central bank meetings, this week should be much quieter. The data highlights will virtually all fall on Friday, which will be discussed below. Today offers very little in terms of data; however it is worth noting that the US is expected to begin restoring economic sanctions on Iran today, following US President Trump pulling out of the nuclear deal in May.
This weekend was a stark reminder of what the end of this glorious summer will look like when it does eventually arrive. For financial markets we can expect one last action-packed week before investors retreat for summer holidays. I will be taking some time off for shared parental leave and look forward to writing again in September. Until then I will leave you in the capable hands of my colleagues.
One of the highlights of the week will be the European Central Bank (ECB) meeting on Thursday. Although no changes are expected in terms of interest rates, it will be worth watching out for comments regarding changes going forward.
A busy week lies ahead, with investors kept on their toes by a host of important economic data releases, a ramp-up in US companies reporting their second quarter earnings results and some key political events.
The week after the release of the monthly US unemployment report (more on that below) is typically quite light on economic data. This period of calmness in markets is only heightened as we usher in the high season for summer. With school holidays beginning over the next few weeks, investors will leave the cities for the beaches which lead to lower levels of liquidity in many assets.
This week marks the start of the second half of the year, if you thought the first half was volatile then we suggest you hold on tight for the next six months.
For what is a relatively quiet week for economic data, the highlight is probably the latest inflation numbers we receive for the US on Friday in the form of the May PCE report.
For football fans, the highlight of the week will be England’s opening world cup game against Tunisia. Whilst there may be theatrics on the pitch, the drama at Westminster is likely to continue. The EU Withdrawal Bill is set to return to the House of Lords before making its way back to the House of Commons for what looks like a fresh battle this week.
This could be a week that defines 2018 with a series of high-level meetings, both economic and political in nature which will set the mood for investors and electorate alike. From Singapore to Whitehall, from Washington to Riga, before ending the week in Moscow, expect newspaper editors to be busy.