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UK Cabinet to discuss Brexit, Eurozone core inflation to remain subdued?

business-articlesUK Cabinet to discuss Brexit, Eurozone core inflation to remain subdued?
  • UK Cabinet to discuss Brexit.
  • Eurozone core inflation to remain weak?
  • CBI order figures to dip in December?
Theresa May to discuss second phase plans for Brexit

Theresa May is due to meet with her ‘Brexit cabinet’ later today for what is expected to be the first discussion amongst senior ministers on what the UK’s post-Brexit relationship with the EU should look like.

This comes after EU leaders formally agreed that negotiations could move on to the second stage of talks at the end of last week.

The PM is expected to tell her MPs about her plans for a transitional period and what the UK will seek in terms of trade.

However Labour has expressed doubts that trade may still not be discussed for months, with recent guidelines published by the EU suggesting that trade talks may not begin until at least March.

The EU's chief Brexit negotiator Michel Barnier has also warned that there would be little chance of the UK getting a bespoke trade deal from the EU, something that will likely scupper any plans to form a new customs union.

Eurozone core inflation expected to remain unchanged

The Eurozone is set to publish November’s final reading of the bloc’s Consumer Price Index later today, with economists forecasting that it will remain unchanged from the preliminary reading.

Analysts expect the CPI figures to confirm that inflation rose from 1.4% to 1.5% last month, meaning that it remains well below the European Central Bank’s (ECB) target rate of 2% - something that may weigh on the euro.

However possibly even more damaging for the single currency will be the accompanying core inflation data, which is expected to have held at a five-month low of 0.9%, suggesting that underlying price growth remains lacklustre.

This is likely to prompt concerns that, should inflation remain weak, it could cause the ECB to raise the pace of, or extend, its bond buying programme once again, further denting the chances of a rate hike anytime in the near future.

UK industrial trends orders to slip in December?

The Confederation of British Industry (CBI) will publish its monthly industrial orders balance later this morning.

The release could see the pound stumble as analysts predict that the index will have tumbled from 17 to 14 in December, with rising input costs expected to have further pressured many firms.

However some observers suggest that orders may have firmed again in December as the increased pace of global growth and weaker Sterling could see order demand strengthen for a second consecutive month.
 
Upcoming Data

Monday, 18th December 2017

10:00                     EUR Eurozone Inflation Rate
11:00                     GBP CBI Industrial Trends Orders
16:00                     USD NAHB Housing Market Index 
 
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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