Macroeconomic figures generally took a backseat last week to politics: Brexit chaos, Italian budget, US-China talks. This is likely be repeated this week with Brexit topping the list of interest. Oil might be the one market driven by fundamentals so the inventory data is worth watching for sure.
Brexit deal on the lines (Full week, EU summit possibly on Sunday)
Will there be a Brexit deal or not? Last week it all started on a positive note when the UK and the EU reached an agreement and it was then accepted by the May government. However, it was obvious right from the start that a shaky coalition with many hard Brexit rebels were the key risk ahead of the parliamentary vote. These fears proved 100% true as resignations from the government followed and the rebels try a no-confidence vote against May. Technically there will be the EU summit this Sunday to sign off the deal but will May survive long enough to go there? Obviously her fall would make a “no deal” outcome more likely with serious consequences for the pound. Affected markets: GBPUSD, UK100.
ECB minutes (Thursday, Wednesday, 12:30 pm BST) and Weidmann speech
The last ECB meeting seemed euro positive but the EURUSD plummeted in following days. Obviously the main catalyst for the move was Italy but it affects interest rates expectations as investors start questioning interest rate hike for 2019. Will investors find any assurance in the minutes? Or will the chief of Bundesbank who’s one of candidates to replace Mario Draghi boost the euro? Affected markets: EURUSD, DE30.
DOE report on oil inventories (Wednesday, 3:30pm BST)
A bloodbath in oil prices halted last week but certainly not because of the US inventories that saw another massive build in excess of 10mb. The key level on OIL.WTI plus suggestions of the OPEC cut drove the price slightly higher but when it comes to inventories their seasonal increase over the past few weeks was the steepest in this decade. Investors will therefore await another report very anxiously. Affected markets: OIL, OIL.WTI.
