The week ahead: Monday 6 February 2017
03 Feb 2017
In what looks to be a relatively quiet week for economic data, with the exception of the UK, we expect to see political news filling the void.
- In the UK, we expect Parliament to move the Government a step closer to firing the official starting gun on the Brexit process, with the ‘Article 50’ trigger Bill headed to ‘Committee stage’ in Parliament. Here amendments will be considered, before the report heads to its ‘Report stage’, then ‘Third reading’ in the Commons and then to the House of Lords. The mood music is that the Bill is likely to move through these stages without major delay.
- In US politics, we expect President Trump to continue his quick-fire approach to seeking to implement his policy goals, with no signs of a change of tack as of yet. Confirmation hearings on his Cabinet appointees will continue, after a week in which we have been reminded that Mr Trump will face push back from Congress on the bits of his policy plan that require Congress’s sign off. Indeed, it appears that two Senate Republicans have taken the unusual step of opposing the President’s Education Secretary nominee Betsy DeVos whilst Democrats earlier this week delayed the approval of the President’s Treasury Secretary nominee Steve Mnuchin in the Senate Finance Committee; Republicans on the Committee had to change the rules to get his vote through.
- This week saw the publication of the Bank of England’s Inflation Report. Despite applying a material upgrade to its UK growth outlook, the MPC maintains a very benign outlook for domestic inflationary pressure. With this outlook in mind, we think that the next Bank rate move is more likely to be up than down, but will not take place any time soon (see out note ‘Steady but (not quite) neutral’ for full details).
- Next week’s UK data might give us a very early idea of how the MPC’s new projections are playing out, with releases due. Official statistics on the performance of the UK industrial and construction sectors are due at the end of the week and will shape expectations of whether any revisions will be made to Q4 GDP, initially estimated at +0.6% q/q. Trade figures due Friday will provide another health check on the boost provided by the weaker pound, post-Brexit vote. Finally, on the housing sector, we have the January RICS housing report and Halifax house price data out too.
- In the Euro area, the economic release calendar looks thin. Here, the highlights are likely to be Germany’s new manufacturing orders for December alongside industrial output numbers for France and Germany.
- Globally, Chinese markets will be back for their first full week after the Lunar New Year holiday, catching up on global developments, particularly from the new US administration. There are also several Chinese economic releases set for publication including the January trade numbers, the latest lending figures and the Caixin services PMI. VC