President Macron’s La Republique En Marche party is expected to win with a wide margin today. The consensus expects En Marche to take 425 seats, eclipsing the 289 seats needed to gain a majority. Political instability in France would be a thing of the past, and this is a potential positive for the Euro. In the UK, above & beyond Brexit talks, pay attention to public disapproval for PM May after the Grenfell Tower disaster. Corbyn promptly appeared on spot to console victim’s families and survivors, whereas May did not. Popular sentiment is turning this into a “rich vs. poor” issue.
USD: Fedspeak will dominate USD action this week, as the market focuses on inflation and on how transitory the recent slump in data will be. What markets need to hear from FED speakers is why they are dismissing the recent softness in core inflation.
EUR: dull week ahead with only focus being PMIs (Fri).
GBP: Above & beyond Brexit talks, pay attention to public disapproval for PM May after Grenfell Tower disaster. Grenfell was public property and was refurbished last year, but no sprinkler system was installed. If such properties were privately owned, management would be thrown in prison. Popular sentiment is turning this into a “rich vs. poor” issue. Finally, BOE’s Carney will publish his Mansion House Speech this week.
CAD: after the BOC’s hawkish shift, this week’s data is expected to underwhelm. Retail sales (Thur) and CPI (Fri) will significantly inform two key issues overhanging the forecast: is inflation still falling (probably), and does the consumer remain resilient following recent strengths (probably not).
AsiaPac: Enter the RBNZ. No change is expected as inflation has risen to the RBNZ’s comfort zone, but lower GDP will only reinforce the RBNZ’s view that the need for interest rate hikes is a long way off.
We also get the RBA Minutes (Tue) which are expected to be broadly neutral. We also have RBA’s Lowe speaking (Mon).
Going into the week I remain bullish on Dow, bearish on Silver & Crude Oil, Bullish Aud & Cad vs. Eur, Usd, Gbp.
by | Jun 18, 2017 – 4.38 pm
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