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April and the second quarter of 2017 are set to begin with a bang, although hopefully not literally as within days of the triggering of Article 50 former political figures within the UK establishment suggest a Falklands-esque defence of Gibraltar should Spain make a play for the British enclave during Brexit negotiations. Theresa May will be hoping that ultimately trade negotiations won’t come down to the sovereignty of the Rock or, for that matter, a Scottish independence vote. However, with tensions between the UK and some European counterparts already beginning to simmer only a handful of days after the Brexit process officially began, the Prime Minister is certain to have her hands full over the course of the next two years.
Many members of the European Council may try to force Brexit to the backs of their minds as they eagerly await the second televised debate between the French presidential candidates (Tuesday; 7:40pm). As always, watchers of the Euro will be closely following the performance of the populist right-wing and anti-EU candidate Marine Le Pen, who is widely expected to win the first round of voting on 23 April. However, a strong showing for either of her rivals – the embattled Francois Fillion or the independent Emmanuel Macron – could help the European single currency recover some of last week’s losses as Euro palls a second defeat for European populists in 2017 elections.
Away from Brexit, bilateral relations are also likely to take centre stage for the US dollar as President Donald Trump meets his Chinese counterpart Xi Jingping for the first time at his Mar-a-logo resort in Florida (Thursday & Friday). While golf will not be on the agenda this time around at the resort, North Korea, trade and the ‘One China’ policy are all likely to be raised, although firm policy iterations are unlikely to be achieved at this let’s get to know each other event.
Also high on the agenda for dollar watchers will be the Fed’s FOMC March meeting minutes (Wednesday; 7pm) for a gauge of just how hawkish the central bank’s meeting was after only the 3rd rate hike in almost a decade, while the possibility of some comment about the reduction of the Fed’s balance sheet will also be sought after.
Central bank minutes come in abundance this week. After last week’s war of the words between the hawks and doves at the European Central Bank, which saw the probability of a rate hike before end-2017 fall drastically from almost 50% to below 20%, the ECB releases its 9 March meeting minutes (Thursday; 12:30pm), while the UK offers minutes from its Financial Policy Committee meeting (Tuesday; 9:30am). Comments from Mark Carney at the Thomson Reuters building (Friday; 10am) could add further to the hawkish discussion in London following a dissenting vote from Kristin Forbes at the bank’s 16 March meeting.
Not just content with multiple central bank meeting minutes this week, a deluge of macroeconomic data is also scheduled, the highlight of which being the monthly US Jobs Report including Non-Farm Payrolls (Friday; 1:30pm). Forecasts are for 175,000 jobs to have been created in March, while the headline Unemployment rate is expected to have nudged lower to 4.7%.
Other releases of note include UK Construction PMI (Tuesday; 9:30am), US Economic Optimism (Tuesday; 3pm), German Inflation (Thursday; 12:00pm), UK Industrial & Manufacturing Production (Friday; 9:30am) and the UK NIESR GDP Estimate (Friday; 3pm).
Key data this week (Sign up here to get our daily live macro-calendar)
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UK Economic Announcements
09:30 Manufacturing PMI
Intl Economic Announcement
00:30 Manufacturing PMI (JP)
01:45 Manufacturing PMI (CN)
08:50 Manufacturing PMI (FR)
10:00 PPI, Unemployment (EZ)
15:00 Manufacturing PMI, Construction Spending (US)
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UK Economic Announcements
09:30 Construction PMI
Intl Economic Announcements
10:00 Retail Sales (EZ)
13:30 Exports/Imports, Trade Balance (US)
14:45 ISM New York (US)
15:00 Economic Optimism (US)
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UK Economic Announcements
09:30 Services PMI
Intl Economic Announcements
8-9am Service PMI (European; various)
09:00 Services PMI (EZ)
13:15 ADP Employment (US)
14:45 Services PMI (US)
15:00 ISM Non-Manufacturing PMI (US)
15:30 Oil Inventories (US)
19:00 FOMC Minutes (US)
—
Intl Economic Announcements
02:45 Caixin Services PMI (CN)
06:00 Consumer Confidence (JP)
07:00 Factory Orders (DE)
08:30 Construction PMI (DE)
12:00 Inflation (DE)
12:30 ECB Minutes (EZ)
12:30 Challenger Job Cuts (US)
—
UK Economic Announcements
09:30 Industrial & Manufacturing Production, Trade Balance
15:00 NIESR GDP Estimate
Intl Economic Announcements
07:00 Trade Balance (DE)
7-8am Industrial Production (European; various)
13:30 Non-Farm Payrolls & Unemployment (US)
15:00 Wholesale Inventories (US)
18:00 Baker Hughes Rig Count (US)
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