After the Federal Reserve hiked rates, attention shifts to the UK political scene and the start of Brexit talks. Macro data comes from the Eurozone and Canada this week, while oil remains a key focus for traders.


Brexit talks


Theresa May doesn’t yet have a deal with the DUP but that is not getting in the way of the official commencement of Brexit talks on Monday. Britain’s negotiating stance looks a little muddled. The official position remains that laid out by Mrs May in January, but increasingly we are seeing calls for a softer stance, Philip Hammond, the UK chancellor, has stepped up calls for jobs and the economy to be at the centre of talks – a sign that he is prepared to push for a softer Brexit.

Sterling could be sensitive to news from the discussions as traders look for signs of what kind of deal Britain is going to get.

Canada data


Canada’s dollar surged last week as the country’s central bank signalled it could be a lot closer to raising interest rates than previously expected. USDCAD dropped to a four month low as the loonie ramped up on speculation the Bank of Canada will start to tighten. Senior deputy governor Carolyn Wilkins said last week that policymakers had “reasons to be encouraged” about the nation’s economy, comments seen a significantly hawkish and later backed up by governor Stephen Poloz.

That puts the spotlight on this week’s batch of economic data from Canada even more as trader parse the information for clues about just when the BoC might pull the trigger. Wholesale sales numbers are due on Tuesday, retail sales on Thursday, and key CPI inflation data is out on Friday.

Eurozone PMIS


As the Eurozone recovery continues to show signs of improvement, traders will be watching for more signals from the latest round of flash PMIs on Friday. The European Central Bank recently upgraded its growth outlook for the bloc but downgraded its inflation forecast.

Manufacturing and services surveys for June will help complete the market’s view of where Q2 growth is likely to be and this could drive some action in euro pairs.

UK housebuilders


Full-year results from Berkeley Group Holdings could set the tone for UK housebuilders as investors try to figure out how Brexit and the general election result are likely to impact the property sector. Last week’s upbeat update from Bellway suggests momentum is being maintained although average prices are coming under pressure. Berkeley Group Holdings (BKG) reports on Wednesday.

Oil stocks


The weekly crude oil inventories from the US are in focus as the market grapples with a prolonged supply glut that is continuing to weigh on prices. In spite of OPEC’s extension of its production cuts, Brent crude and WTI prices have been hit as traders remain bearish .

Last week the International Energy Agency warned that while demand  will outpace supply later in the year, excess inventories will persist well into 2018, a fact that it said should make “sobering reading” for producers looking to restrain supply.

Economic Calendar

(All times BST)

Monday, 19 June

00:01 – Rightmove UK house price index

00:50 – Japan trade balance, exports, imports

Tuesday, 20 June

02:30 – Australia house price index, RBA monetary policy meeting minutes

07:00 – German PPI inflation

13:30 – Canada wholesale sales

13:30 – US current account Q1

Wednesday, 21 June

00:50 – Bank of Japan monetary policy meeting minutes

05:30 – Japan all industries activity

09:30 - UK public sector net borrowing

15:00 – US existing home sales

15:30 – US crude oil inventories

21:00 – RBNZ interest rate statement

22:00 – RBNZ official cash rate

Thursday, 22 June

09:00 – ECB economic bulletin

10:00 – Italian retail sales

13:30 – Canada retail sales, core retail sales

13:30 – US weekly unemployment claims

Friday, 23 June

01:30 – Japan flash manufacturing PMI

08:00 – French flash manufacturing & services PMI

08:30 – German flash manufacturing & services PMI

09:00 – Eurozone flash manufacturing & services PMI

13:30 – Canada CPI inflation figures

14:45 – US flash manufacturing & services PMI

15:00 – US new home sales

Corporate Calendar


Tuesday, 20 June

FedEx Corp (FDX) – Q4/2017, EPS estimate 3.867

Wednesday, 21 June

Oracle Corp (ORCL) – Q4/2017, EPS estimate 0.784

Berkeley Group Holdings (BKG) – Y/2017, EPS estimate 4.310

Hornby (HRN) – Y/2017, EPS estimate -0.060

Thursday, 22 June

Barnes & Noble (BKS) – Q4/2017, EPS estimate -0.233

Bed Bath & Beyond (BBBY) – Q1/2018, EPS estimate 0.663


Source: Bloomberg

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