The pound has made some early gains at the start of this week, as investors are showing optimism ahead of parliamentary votes on Brexit options today. With the Brexit deadline currently due on the 12th of April, Parliament will need to reach an agreement on the next steps if they wish to avoid a no deal outcome. Many hope that among the uncertainly, a softer approach than Theresa May’s defeated withdrawal agreement may be pursued, however a soft approach will have strong opposition from hard line Brexiteers within the Conservative Party. Should Parliament fail to agree on the next steps PM May could try bringing her deal back in front of Parliament as soon as Tuesday.
The Week Ahead:
Brexit will be the key focus for the pound once again with under two weeks to the deadline date. Depending on what is discussed in Parliament today, this will shape the rest of the week’s debates and votes. For hard data, Construction PMI’s will be released on Tuesday at 9.30 BST, with Services PMI’s released at 9.30 BST on Wednesday, although these a likely to have little impact on the markets due to Brexit.
For the euro, the main event will be inflation data. This was released this morning, under forecast at 1.4% for the Eurozone. This latest release confirms what the ECB have previously said, with interest rates likely to remain low for some time yet. On Thursday at 13.30 BST the minutes from the last ECB monetary Policy meeting will be released, providing insight to investors into current economic conditions and hints towards future policy.
For the US dollar, non-farm employment change and average earnings will gather the most attention this week when released at 13.30 BST on Friday. The wage data will be watched closely, as wage rise inflation is likely to rise with it, potentially bringing forward the timing on the next interest rate rise. This afternoon, retail sales and core retail sales will be released for March, alongside Manufacturing PMI’s.