Key Events In The Coming Week: All About Brexit

With global markets gyrating on every piece of news surrounding the Brexit drama, what’s the timetable for UK-related (and all other macro) events this week and beyond?

For starters we should hear from David Cameron this morning who is scheduled to address Parliament, which follows a statement by Chancellor George Osborne who tried to "calm" markets and judging by the performance of bank stocks appears to have failed. Later today German Chancellor Merkel is also due to meet with President Hollande, PM Renzi and EU President Tusk in Berlin, so that’s also worth keeping an eye on. That comes before what will perhaps be the big focus this week when tomorrow the commencement of a two-day EU leaders summit kicks off. EU member states will expect an analysis by the UK government of the outcome of the referendum and the first indications of how the UK would want to proceed, although it’s highly unlikely that we see a rush into the withdrawal procedures of Article 50. Instead the EU is likely to want some clarity over the direction of negotiations, with any prevarication from the UK side seen as being likely to add uncertainty for the EU economy and adding to negative impact.

Looking ahead and along with the obvious focus on what will likely be a barrage of political meetings in coming weeks, some other events worth mentioning are the release of the services and composite PMI’s on July 5th which should capture some of the sentiment during and after the referendum, Gilt auctions on July 5th and 7th, the Office for Budget Responsibility fiscal outlook on July 12th and of course the BoE meeting on July 14th.

Away from political news, there is the usual docket of purely economic news.

  • It’s a quiet start to the week today (outside of the obvious EU debate) with the only data due out of the European session being the latest M3 money supply data for the Euro area. In the US we’ll get the flash June services (expected to rise to 51.9 from 51.3) and composite PMI’s, as well as the advance goods trade balance for May and also the Dallas Fed manufacturing activity index.
  • We start in Europe on Tuesday with the various confidence indicators out of France and Italy, as well as CBI sales data in the UK. The main focus in the US on Tuesday will be the third revision for Q1 GDP (expected to be revised up to +1.0% qoq from +0.8%), while we’ll also get consumer confidence data, the Richmond Fed manufacturing index and finally the S&P/Case-Shiller home price index for April.
  • Turning to Wednesday, we’re kicking off in Asia with consumer sentiment data in China and also retail trade data in Japan. Over in Europe we’ll get the June confidence indicators for the Euro area, while German CPI data in June is also due out. The UK will also release the latest money and credit aggregates numbers. In the US on Wednesday we’ll get the PCE core and deflator prints for May (both expected to rise +0.2% mom), as well as personal income and spending data for the same month and finally the latest pending home sales data.
  • We start in Japan again on Thursday where we’ll get the latest housing starts data along with industrial production data. It’s busy in Europe on Thursday. The Euro area CPI print for June will be released, along with French and Italian CPI, UK Q1 GDP (final revision) and also the June unemployment reading in Germany. We’ll also get the latest ECB minutes on Thursday. US data on Thursday consists of initial jobless claims and the Chicago PMI for June.
  • It’s a busy end to the week in Asia on Friday. In China we’ll get the official manufacturing and non-manufacturing PMI’s for June, while in Japan we get CPI for May, manufacturing PMI and also the Q2 Tankan survey. In Europe on Friday we get the final manufacturing PMI numbers in June, while over in the US we’ll be keeping a close eye on the ISM manufacturing print (little change expected), while construction spending data, manufacturing PMI (final June revision) and vehicle sales data for June rounds things off.

Charting the above:

Away from the data there will be plenty of focus on the aforementioned two-day EU leaders summit which kicks off tomorrow. Also worth keeping an eye on is the three-day ECB Forum in Portugal which starts today, with Yellen, Draghi and Zhou scheduled to speak. Elsewhere, over at the Fed we’ll hear from Powell on Wednesday and Bullard on Thursday. We’ll also hear from a number of ECB members at the event in Portugal over the next few days. It’s also worth keeping an eye on the release of the second part of the Fed’s stress test results on Wednesday.

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Finally, here is a summary of just the key US events this week from Goldman

Monday, June 27

  • 08:30 AM Advance goods trade balance, May (GS -$60.0bn, consensus -$59.4, last -$57.5bn): Following a smaller-than-expected trade deficit last month, we expect the goods trade deficit to widen. The advance goods trade balance is a new report released prior to the full trade report, which also includes trade in services.
  • 09:45 AM Markit Flash US Services PMI, June preliminary (consensus 52.0, last 51.3)
  • 10:30 AM Dallas Fed manufacturing index, June (consensus -15.0, last -20.8)

 

Tuesday, June 28

  • 08:30 AM GDP (third), Q1 (consensus +1.0%, last +0.8%): Personal consumption, Q1 (consensus +2.0%, last +1.9%); Consensus expects GDP and personal consumption to be revised up to 1.0% and 2.0% in Q1, respectively.
  • 09:00 AM S&P/Case-Shiller home price index, April (GS +0.8%, consensus +0.6%, last +0.9%): The Case-Shiller home price index appears to have been influenced by seasonal adjustment challenges recently. We expect a moderate gain in house prices in the April report. Over the past year, the 20-city index has increased 5.4%.
  • 10:00 AM Conference Board consumer confidence, June (GS 94.5, consensus 93.4, last 92.6): We expect consumer confidence to move up in June. Although the University of Michigan’s estimate of consumer sentiment edged down last week, sentiment remains near post-crisis highs.
  • 10:00 AM Richmond Fed manufacturing index, June (consensus +3, last -1)

 

Wednesday, June 29

  • 8:30 AM Personal income, May (GS +0.3%, consensus +0.3%, last +0.3%):
    • Personal spending, May (GS +0.5%, consensus +0.4%, last +0.3%);
    • PCE price index, May (GS +0.25%, consensus +0.20%, last +0.30%)
    • Core PCE price index, May (GS +0.18%, consensus +0.20%, last +0.20%)
    • PCE price index (yoy), May (GS +1.04%, consensus +1.00%, last +1.10%)
    • Core PCE price index (yoy), May (GS +1.67%, consensus +1.60%, last +1.60%)
  • 9:30 AM Fed Chair Janet Yellen (FOMC voter) speaks: Federal Reserve Chair Yellen will be participating in a panel with Bank of England Governor Mark Carney and ECB President Mario Draghi at an ECB central banking conference in Sintra, Portugal.
  • 10:00 AM Pending home sales, May (consensus -1.1%, last +5.1%): Consensus expects pending home sales to decline in May. We have found pending home sales—based on contract signings rather than closings—to be a decent leading indicator of existing home sales with a one- to two-month lag.

 

Thursday, June 30

  • 08:30 AM Initial jobless claims, week ended June 25 (GS 265k, consensus 269k, last 259k); Continuing jobless claims, week ended June 18 (consensus 2,152k, last 2,142k): We expect initial jobless claims to rise to 265k, but to remain near post-crisis lows. Last week, initial claims declined to 259k, in large part due to a sizeable drop in California.
  • 09:45 AM Chicago PMI, June (GS 51.0, consensus 51.0, last 49.3): We expect the Chicago PMI to increase in June, slightly above the breakeven level of 50. The series has been relatively volatile of late, showing sizable swings between expansion and contraction reads.
  • 2:00 PM St. Louis Fed President Bullard (FOMC voter) speaks: Federal Reserve Bank of St. Louis President James Bullard will be giving a speech at the Society of Business Economists annual dinner in London. Recently, President Bullard admitted that the missing long-run federal funds rate “dot” from the Fed’s June Summary of Economic Projections was his, and stated that he sees one interest rate hike over the forecast horizon through 2018.

 

Friday, July 1

  • 09:45 AM Markit Flash US Manufacturing PMI, June final (consensus 51.4, last 51.4): Consensus expects the Markit manufacturing survey to remain roughly in line with its flash estimate. Most responses to the survey are received by the time of the preliminary release, and revisions in the final release tend to be minor. We find that the flash Markit PMI does contain some predictive power for the ISM.
  • 10:00 AM ISM manufacturing, June (GS 51.0, consensus 51.4, last 51.3): Manufacturing surveys were mixed in June. The Empire State (+15.0pt to +6.0) and Kansas City Fed (+7.0pt to +2.0) surveys showed improvement, moving out of contractionary levels. While the Philly Fed manufacturing index also rose (+6.5pt to +4.7), most components were softer overall. On net, our manufacturing survey tracker—which is scaled to the ISM index—stands at 51.9.
  • 10:00 AM Construction spending, May (GS +0.4%, consensus +0.6%, last -1.8%): We expect construction spending to increase 0.4% after a softer-than-expected report last month.
  • 11:00 AM Cleveland Fed President Mester (FOMC voter) speaks: Federal Reserve Bank of Cleveland President Loretta Mester will be giving a speech on the economic outlook and monetary policy at the European Economics and Financial Centre in London. Q&A from the audience is expected.
  • 4:00 PM Total vehicle sales, June (GS 17.1mn, consensus 17.3mn, last 17.4mn): Domestic vehicle sales, June (GS 13.8mn, consensus 13.4mn, last 13.3mn); Our auto analysts expect total vehicle sales to edge down slightly from May.

Source: DB, BofA, GS