US GDP & Brexit negotiations hold markets’ attention
A somewhat busy day for markets, with most of the announcements coming from Europe and the US, meanwhile Brexit negotiations continue.
The most important announcement to come out for markets tonight is the US GDP figure. GDP is critical as it reflects growth in the economy. Growth in the world’s largest economy is vital for the health of the global economy. This is because all other countries rely on trade with the US. Trade with the US allows other countries to grow their economies, which has many benefits. It will also be interesting to see if the growth in the economy has picked up since Donald Trump has come into office. Although his main policies have not been implemented yet, we still may see an up-tick in the GDP figure due to a spike in confidence after the election. On the other hand, Trump has removed the US from the TPP. Will this have an effect on US growth? Or is it still too early to tell? Other information set for release includes: Unemployment Claims, Final GDP Price Index and Natural gas Storage. Meanwhile, Fed Reserve Members, Robert Kaplan & John Williams, are due to speak.
Europe has a host of information set to publication. This data includes: Italian Wage Inflation, European Consumer & Industrial Confidence, Services Sentiment, Economic Sentiment Indicator and Business Climate, Portuguese Consumer & Business Confidence, Spanish Flash CPI, Swiss Economic Barometer and German Final CPI. The most important figure to come out of Europe is the German CPI. As the largest European economy, it is crucial that the German economy remains strong. One of the more important figures that reflects this strength is the CPI figure. A healthy figure reflects price growth of products/services within the economy which is being met by consumer demand. This means that money is flowing through the economy, which in turn spurs economic growth.
Elsewhere around the world, Canada is releasing IPPI & RMPI data.
Finally, it is important to be mindful that Brexit negotiations will be in full swing now. Yesterday, when Article 50 was triggered, it was mainly a publicity event as the formal letter from the UK was handed to the EU to start negotiations. Now that that is out of the way, negotiations can really start to take shape.