We had numerous central bank meetings to get our teeth into last week, including the FOMC last Wednesday. The data flow picks up again over the next few days with several Fed speakers to listen out for as well, plus more Brexit developments including the Supreme Court’s ruling scheduled for the early part of the week.
The domestic UK calendar is light on data; instead focus will be on the ‘momentous verdict’ by the UK Supreme Court on the lawfulness of PM Johnson’s suspension of Parliament. After other mixed rulings by courts in both Scotland and the UK, it is not clear which way the decision will go, although the weekend press was leaning towards the decision going against the government. It also isn’t obvious whether Parliament would immediately reopen or stay open should the government seek to close it by other means.
Last week’s ‘doji’ in cable says it all as indecision and consolidation has stalled sterling’s advance. The rally looks tired near-term and the market may be prone to a corrective dip, having hit the long-term trendline from the 2016, 2017 and 2018 lows.
In the Eurozone, another round of sentiment readings will be released with today's purchasing managers’ indices for September. After plunging over 2018, the Eurozone composite PMI has spent 2019 moving largely sideways at just above the 50 threshold which indicates anaemic economic growth. It is important to remember that these surveys tend to correlate reasonably well with actual GDP growth.
Stateside data this week will be interesting as investors grow increasingly concerned about the macro outlook. Manufacturing PMIs are expected to stay above that all-important 50 threshold but will still point to the weakest pace of expansion since September 2009. We also get core PCE, the Fed’s preferred measure of inflation released on Friday.
Here are the key events on the calendar across global markets this week:
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