During the weekend, China PMI data for came in on the low side of expectations. Also, EU leaders continue to play hardball with Britain. Markets have largely ignored rising tension in NoKorea for now, but the tension is more internal to NoKorea than external. The threats against the US are simply not realistic if only based on the continuous missile test failures. Remember also that Japan will be quieter this week due to Golden Week Holidays.
USD: busy week in the US. US PCE Price Index (Fed’s inflation gauge), ISM Manuf. and construction spending (Mon); ADP and ISM non-manuf (Wed), Trade data and Durable Goods (Thur). Markets will tune in for FOMC (Wed) but with no press conference or economic updates, it will probably be a dull one. NFP will be issued (Fri) and of course the focal point is AHE. Beyond that, watch out for any news on potential delays of Trump’s tax reform and/or infrastructure plan, and also S&P companies’ earnings.
EUR: busy week in the EU as well with manuf. PMI and Unemployment (Tue), GDP (Wed), The last Televised French Presidential Debate (Wed), EU Services PMI (Thur).
GBP: 3 key UK data releases this week: PMI surveys (Tue-Thu).
CAD: BOC’s Poloz will discuss NAFTA and broader trade policy risks in Mexico City (Thur), but there’s also TSX earnings to be aware of, and unemployment (Fri).
Asia: RBA meets (Tue) and no change is expected. However watch the accompanying statement for clues on housing, labour market and inflation.
China will issue Caixin PMIs (Tue, Thur).
Going into the week I remain bullish on the Nasdaq in particular (Dax is runner-up) and bearish Silver. GBP remains the leader in FX, whilst NZD & CAD remain the laggards. Watch Jpy as well, as it currently sits at a crossroads and might very well weaken more into the week.
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