Summary:
- “Leave or delay” votes to be held this week in the UK parliament
- Donald Trump expected to present budget proposal on Monday
- Delayed US retail sales print for January to be released today
A number of macroeconomic releases is scheduled for the week ahead but attention will be mostly paid to political events. The UK parliament will hold final Brexit votes on Tuesday, Wednesday and Thursday while the US President Donald Trump is expected to present 2020 budget proposal on Monday. Last but not least, reports from the US Department of Energy and OPEC may help crude price break out of the consolidation range.
Readings scheduled for Monday:
- 12:30 pm GMT - US, Retail sales for January (delayed by shutdown). Expected: -0.1% MoM
Central bank speakers scheduled for today:
- 1:00 pm GMT - Riksbank’s Ohlsson
- 1:00 pm GMT - BoE’s Haskel
What to watch for the remainder of the week?
Final Brexit votes (Tuesday, Wednesday and Thursday)
While there were plenty of “meaningful” Brexit votes in the UK parliament in the past few months, the ones scheduled for this week are likely to have clear and direct impact on the Brexit outlook. Members of parliament are set to vote on Theresa May’s Brexit deal one more time on Tuesday. A defeat looks like a done deal and therefore the next two votes will be crucial. On Wednesday the UK parliament will vote whether to leave the European Union at the end of March without a deal in place. In case this motion is also rejected, vote on whether to delay Brexit will be held on Thursday. With less than three weeks until Brexit date it looks like markets will finally be given some more clarity. Affected markets: GBPUSD, UK100.
Releases from the United States (2020 budget proposal - Monday, CPI inflation - Tuesday, durable goods orders - Wednesday, retail sales - Thursday, Michigan data - Friday)
The US markets should be watched carefully during the week ahead thanks to number of high-profile economic data scheduled for release. However, even more important event will take place on Monday as the US President Donald Trump is expected to present 2020 fiscal budget draft. As the next year will be presidential elections year in the US one should keep in mind that Trump may propose some fiscal stimulus. Inflation, survey and retail sales data combined with budget proposal may provide a nice update on the outlook for the US economy. Affected markets: US500, TNOTE.
Oil market data (Wednesday - DOE report; Thursday - OPEC report)
Oil price headed lower last week as news of Venezuela maintaining high exports raise concerns over the potential oversupply. However, at the same time rumours surfaced saying that OPEC may have curbed output by a stellar 0.5 million barrels in February. Upcoming week may provide some more clarity as OPEC is set to release its monthly oil market report on Thursday. Apart from that, traders will continue to follow inventories data after last week’s DOE report showed major build that was way out of line with seasonal patterns. Affected markets: OIL, OIL.WTI.
S&P 500 (US500) pulled back after failing to break above the key resistance zone ranging 2815-2825 pts. The US index managed to somewhat halt decline in the vicinity of 200-session moving average (purple line on the chart above). A pin bar candlestick pattern painted on Friday may support bulls during today's session. However, Trump's budget draft may turn to be a weigh for stocks. Source: xStation5
