Donald Trump

The Week Ahead – Brexit, The BoE, The RBA and Trump in Focus

On the Macro

For the Dollar:

Key stats include November factory orders due out on Monday, private sector PMI numbers from both the Markit and ISM surveys on Tuesday. On Wednesday, nonfarm productivity and unit labor costs for the 4th quarter are due out. Following last week’s jobless claims, labor market numbers will garner more attention than usual in the week ahead.

4th quarter GDP numbers will also be released during the week. A 30th January’s scheduled release was delayed due to the extended government shutdown.

The Dollar Spot Index ended the week down 0.56% to $95.794.

For the EUR:

Stats include Spanish unemployment numbers due out on Monday, member service sector PMI numbers and retail sales figures out of the Eurozone. Economic data due out of Germany includes factory orders, industrial production, and trade figures due out Wednesday through Friday. Of less influence will be inflation figures out of Italy on Monday.

The EUR/USD ended the week up by 0.38% to $1.1406.

For the Pound:

Key economic data due out is limited January construction and service sector PMI numbers on Monday and Tuesday. We will expect January house price figures to be largely ignored on Thursday. The BoE’s first policy decision of the year and Brexit chatter will likely to take the spotlight.

The GBP/USD ended the week up 2.52% to $1.3196.

For the Loonie:

Stats include December trade data due out on Tuesday, housing sector figures and January’s Ivey PMI on Wednesday and employment figures due out on Friday. Trade figures, the Ivey PMI and employment figures will be the main area of focus from a data perspective.

The Loonie ended the week up 0.32% to C$1.3218 against the U.S Dollar.

Out of Asia

It’s a busier week ahead.

For the Aussie Dollar:

Key stats include retail sales figures and trade data due out on Tuesday, which will be out ahead of the RBA’s February policy decision. The RBA will also release its statement of monetary policy on Friday. The markets will likely brush aside December building approvals, due out on Monday.

The Aussie Dollar ended the week up 0.15% to $0.7179.

For the Japanese Yen:

It’s a relatively quiet week ahead. Key stats are limited to December household spending and current account figures due out on Friday. While household spending figures will provide some direction, expect market risk sentiment to drive the Yen through the week.

The Japanese Yen ended the week up 0.21% to ¥109.55 against the U.S Dollar.

For the Kiwi Dollar:

Stats are limited to December building consents due out on Monday and 4th quarter employment numbers that are scheduled for release on Thursday. Expect the 4th quarter employment numbers to be the key driver on the data front.

The Kiwi Dollar ended the week up 1.42% to $0.6839.

Out of China:

There are no material stats scheduled for release, with China on holiday for Chinese New Year for the week. Volumes will be on the lighter.


Brexit: We’re onto Plan C, or at least that is the hope. The alternative is a no deal departure. BoE views on what lies ahead could add to the Pound’s troubles this week.

Trump and the State of the Union Speech: The Speech is on Tuesday. Expect some market moving comments.

U.S – China Trade War:  There were no negative updates to hurt the global financial markets, with talks next scheduled to resume in March.

Hua Wei: Will Canada extradite Huawei CFO Wanzhou to the U.S? Expect a political storm and a material impact on any hopes of a trade agreement between the U.S and China should Wanzhou be delivered.

The Rest

On the monetary policy front,

For the AUD, the RBA will deliver its policy decision and rate statement on Tuesday. Will the recent hike in mortgage rates by the RBA and slowdown in economic growth in China be reasons for the RBA to take a more dovish stance and adjust the language on the likely direction of the next policy move? The RBA will also release its statement of monetary policy on Friday that will give more clues on how the RBA sees the road ahead.

For the GBP, Thursday’s BoE policy decision will draw plenty of attention. Members of the MPC remain in a state of flux as Brexit uncertainty continues to weigh. There may be concerns over the economic outlook should businesses accelerate their relocation beyond British borders, as the prospects of a no-deal departure rise once more.