A Busy Week: Trump-Xi at G20, Brexit, Italian Budget, Fed

Major European bourses ended the day in green as worries regarding Brexit and Italy eased. The DAX, CAC and STOXX50 finished 1.45%, 0.97% and 1.13% respectively after signs that Italy was arranging to redraft their spending plans as this issue has caused increasing tensions with the European Union. As a result, on-going matters have bolstered volatility in European markets, especially the Italian banking sector.


In UK, the FTSE 100 joined its European cousins. The benchmark index finished the day up 1.20% as Brexit uncertainties eased after a positive weekend vote in Brussels. Thus, shares in the financial sector led the advance. UK Mid Cap FTSE 250 also had a positive day, gaining 1%. Moreover, energy shares traded positively as oil markets recouped some of its recent losses amid a global supply glut.


On the other side of the pond, US equity markets continued the trend as retailer shares gained on the back Black Friday and Cyber Monday sales. This traditionally begins the US holiday shopping season. The DOW, S&P 500 and the tech heavy NASDAQ added 1.46%, 1.55% and 2.31% respectively.


For UK, this week’s main event is of course Brexit related. UK Prime Minister Theresa May has to try to persuade parliament to agree to her Brexit deal.


For US, President Donald Trump and his Chinese counterpart Xi Jinping are expecting to meet at the G20 meeting in Buenos Aires. Furthermore, FED minutes are due later this week. Expectations have taken a dovish tilt over the past two weeks with the markets continuing to price in a December interest rate hike. However, markets have now only priced in one hike in 2019 instead of the two hikes anticipated just a month ago.

UK Data for the week ahead

Date

Time (GMT)

Data

Forecast

Previous Read

Tuesday 27th

11:00

CBI Realised Sales

10

5

 

Wednesday 28th

12:01

BRC Shop Price Index (y/y)

 

-0.2%

 

Tentative

Bank Stress Test Results

 

 

 

Tentative

BOE Financial Stability Report

 

 

Thursday 29th

09:30

Net Lending to Individuals (m/m)

 

 

 

 

M4 Money Supply (m/m)

0.3%

-0.3%

 

 

Mortgage Approvals

65K

65K

Friday 30th

12:01

GfK Consumer Confidence

-11

10

 

07:00

Nationwide HPI (m/m)

0.1%

0.1%


Note: Brexit remains the forefront for global markets, especially, UK markets.


© Akif SH. Din, AGORA-direct Limited, 27/11/18

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