- Markets: Equity markets were broadly unchanged last week. Investors weighed up the appeal of Central Banks remaining relatively supportive for longer against concerns that global economic growth continues to lack momentum.
- Central Banks: The Federal Reserve's Chair’s semi-annual testimony to congress was relatively dovish. Chairman Powell stated that there are 'conflicting signals and crosscurrents' in the economy. The market read these comments as signs the Fed would remain patient before considering further rate rises.
- Geo-politics: President Trump said he’ll extend a deadline to raise tariffs on Chinese goods. He cited “substantial progress” in the latest round of talks. Separately President Trump and Kim Jong Un’s summit meeting ended with no agreement having been reached.
- Brexit: As the March deadline approaches the UK parliamentary outcome on Brexit remains unclear, the latest position is that Theresa May’s government is going to table three potential parliamentary votes between March 12th and 14th. The first vote will put the available deal with the EU back to parliament, in the event that is rejected the following day a vote will be undertaken to take the No deal off the table and if the no deal outcome is removed a further vote would take place on the 14th March to seek an extension to the current Article 50 deadline of March 29th. If none of the 3 votes are carried it is unclear what the next step will be. In the meantime Labour has altered their position and is now open to backing a second referendum on Brexit.
The US economy cooled by less than expected last quarter (2.6% Q/Q v 2.2% expected) as business investment picked up. This suggests that growth could be stronger for longer as the Fed takes a patient approach to interest rates.
Recent tax cuts have continued to aid growth and helped to bring the full-year figure to 3.1%. While the expansion is poised to continue amid a still-healthy consumer, a supportive Fed and a robust labour market, the pace could cool amid the trade war, slowing global growth and as the impact of fiscal stimulus begins to fade.
- US: Lots of data releases again this week gauging the temperature of the economy - motor vehicle sales, construction spending data, new home sales data and US non-farm payrolls are announced on Friday
- UK: BOE minutes come out on Tuesday
- EU: On Thursday we get the ECB rate decision and news conference, Euro area GDP figures are also announced the same day; German factory orders and Italian industrial production among other notable releases.
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