Brexit dominates the week ahead with several key votes likely to happen in London from tomorrow onwards, with a real sense of doom and gloom now gripping the country about the March 29 exit.
First up Australia faces a quiet week after the tooing and frooing last week over economic growth and the election campaigns in NSW and federally.
Lending data out tomorrow should show a small bounce housing finance but the NAB’s monthly survey is forecast to show weaker readings for business conditions and confidence and Westpac’s monthly survey of consumer confidence is also expected to be weak.
The UK House of Commons will vote Tuesday night (Sydney time) on a revised Brexit deal. MPs rejected Mrs. May’s deal by a large margin in January, and the government is expected to roll out updates to the proposed withdrawal agreement before Parliament votes.
If MPs strike down the revised deal, the House of Commons may vote Thursday on delaying the UK’s exit from the European Union on March 29.
UK analysts say that a defeat tomorrow night could damage the government of Theresa may (especially if its a large loss like in January) to the point where she has no option but to resign. Could a general election then be called?
A narrow win by her should enable her to cling on for a while, but Britain’s fate is in the hands of the EU.
EU ambassadors are scheduled to meet in Brussels on Wednesday and they could very well undermine Mrs. May tortured struggles.
A bad week for the May-led Conservatives could see a fractured UK Parliament move towards a second referendum.
With global growth slowing, the US and EU economies showing signs of pressure (Australia weak), China suffering from the Trump trade war (as is the US with a huge trade deficit in 2018 of more than $US600 billion, thanks to Trump’s policies), confusion over Brexit is the last thing skittish sharemarkets want to see.
After the shock slowdown in US job creation in February (just 20,000 from the revised up 311,000 in January), all eyes will be on retail sales for January which are projected to rise after the 1.2% slump in December. If they don’t rise strongly, more gloom.
So what will happen if the market forecast for a fall of 0.1% happens?
February’s consumer price data will be out tomorrow – a slight slowing to a core reading around 2% to 2.1% is expected.
Data on durable goods orders on Wednesday and industrial production data on Friday will be watched to see how the economy started 2019 and a feeling that it has been a slow beginning, is backed up by the figures. Certainly, a slow start to the year wasn’t supported by January’s very strong jobs data.
President Trump releases his budget for the 2020 US financial year. The budget reveal was delayed by the government shutdown in January. It is considered to be DOA (Dead On Arrival) as a policy document.
There are a few quarterly reports in the US due this week – Dollar General (which has already taken a huge impairment charge and write down) will produce weak figures). Adobe and Oracle also report this week, as does Prada in Europe.
Tesla launches a new vehicle (a crossover sedan/SUV) on Thursday – what will the increasingly volatile CEO, Elon Musk say?
The Bank of Japan is not expected to make any change to its ultra-easy monetary policy on Friday with economic indicators showing growth and inflation remain soft.
China releases combined production, investment, retail sales, and housing data for January and February on Thursday, with house prices to follow soon after. Some slowing in the pace of activity is expected.
