The Week Ahead: 5th – 9th June

The British Pound suffered a miserable week in the lead up to the General Election on June 8, falling to the lowest level in over 5 weeks. Investors recoiled as an influential pollster, YouGov, published the results of a wide-ranging survey which suggested that Theresa May’s Conservative Party may fall short of winning a majority in Parliament. Clearly, financial markets believe that anything short of a majority for the Conservatives is negative for Sterling, as the alternatives arguably create more uncertainty in the upcoming Brexit negotiations.

Theresa May’s performance in the aftermath of calling the election has been called “robotic” at best and “shambolic” at worst. Missing the 7-way televised debate last week may emphatically come back to haunt the Prime Minister. Rivals seized the chance to score points, with the Liberal Democrat Leader Tim Farron hitting home with a gem of a quip: “The Prime Minister is not here tonight. She can’t be bothered, so why should you? In fact, Bake Off is on BBC2 next. Why not make yourself a brew? You’re not worth Theresa May’s time. Don’t give her yours.”

In contrast, the much-maligned Jeremy Corbyn has made far fewer missteps and gained support when he decided to make a late decision to attend the aforementioned debate. Indigo FX notes that pollsters often underestimate Conservatives support due to the ‘closet Tory’ effect and may offer a distorted picture. One thing is certain: volatility in Sterling will continue to rise in the lead up to the voting day.

In the U.S., the Dollar has had another interesting week. Donald Trump is continuing to lose friends and aggravate people after his latest high-profile decision to take the United States out of the Paris Climate Accords, triggering a Global outcry. That said, the economy is humming: unemployment fell to a multi-year low of 4.3% amid another solid Non-farm Payrolls report.

Here’s the top-tier economic data likely to move the markets next week:

Monday
09:00  EUR     Markit Services PMI (May)
09:00  EUR     Markit PMI Composite (May)
09:30  GBP     Markit Services PMI (May)
13:30  USD     Nonfarm Productivity (Q1)
13:30  USD     Unit Labor Costs (Q1)
14:45  USD     Markit Services PMI (May)
15:00  USD     SM Non-Manufacturing PMI (May)
15:00  USD     Factory Orders (MoM) (Apr)
15:05  USD     Labor Market Conditions Index (May)
16:30  USD     3-Month Bill Auction
16:30  USD     6-Month Bill Auction

Tuesday
00:01  GBP     BRC Like-For-Like Retail Sales (YoY) (May)
09:30  EUR     Sentix Investor Confidence (Jun)
10:00  EUR     Retail Sales (YoY) (Apr)
10:00  EUR     Retail Sales (MoM) (Apr)
n/a      GBP     30-y Bond Auction
13:55  USD     Redbook Index (YoY) (June 2)
13:55  USD     Redbook Index (MoM) (June 2)
15:00  USD     JOLTS Job Openings (Apr)
15:00  USD     IBD/TIPP Economic Optimism (MoM) (Jun)
16:30  USD     4-Week Bill Auction
21:30  USD     API Weekly Crude Oil Stock

Wednesday
08:30  GBP     Halifax House Prices (3m/YoY) (May)
08:30  GBP     Halifax House Prices (MoM) (May)
10:00  EUR     Gross Domestic Product s.a. (YoY) (Q1)
10:00  EUR     Gross Domestic Product s.a (QoQ) (Q1)
12:00  USD     MBA Mortgage Applications (June 2)
15:30  USD     EIA Crude Oil Stocks Change (June 2)
20:00  USD     Consumer Credit Change (Apr)

Thursday
00:01  GBP     RICS Housing Price Balance (May)
24hr   GBP     Parliamentary Election
12:45  EUR     ECB Interest Rate Decision
12:45  EUR     ECB Interest Rate Decision
13:00  EUR     ECB Monetary Policy Statement and Press Conference
15:30  EIA      Natural Gas Storage Change (Jun 2)

Friday
09:30  GBP     Consumer Inflation Expectations
09:30  GBP     Industrial Production (YoY) (Apr)
09:30  GBP     Manufacturing Production (MoM) (Apr)
09:30  GBP     Industrial Production (MoM) (Apr)
09:30  GBP     Manufacturing Production (YoY) (Apr)
09:30  GBP     Total Trade Balance (Apr)
09:30  GBP     Goods Trade Balance (Apr)
09:30  GBP     Trade Balance; non-EU (Apr)
13:30  USD     Wholesale Inventories (Apr)
14:00  GBP     NIESR GDP Estimate (3M) (May)
18:00  USD     Baker Hughes US Oil Rig Count