FX Market: THE BREXIT TRIGGER IS FINALLY HERE

By chuks obiri
chuks_obiri@yahoo.com

This week will be a big one as Investors brace up for the Official Trigger of article 50 by British Prime Minister Theresa May.
Also, with the failure to pass Donald Trump’s Health Bill, we see rising concerns as to how the Trump administration will fulfil the tax reform mandate part of its Fiscal Spending plans. Defeat for the Bill adds to doubts about the Trump administration’s ability to push through the pro-growth economic agenda he promised. It is expected that as this doubts increase the FEDZ may slow down on their plans to tighten further in the year.
We expect the U.S crude-oil inventory to begin to slip as Saudi Arabia keeps to its promise of reducing exports thereto by 300,000 barrels per day, to further reduce the glut in supply.
MONDAY
EUR: (9.00AM) IFO BIZ CLIMATE; A heads-up into the biz climate in EU, a strong outcome should firm up the EURO.
TUESDAY
CAD: (3:10PM) BOC GOVERNOR (STEPHEN POLOZ SPEAKS); The takeaway from this would be the press conference that takes place 65mins after the statement is released (this should be at about 4.15PM GMT+1), also the text of the statement will be released 15mins before the listed time of the statement schedule.
WEDNESDAY
GBP: (TENTATIVE) ARTICLE 50 TRIGGER; Not yet on the economic timetable nevertheless, this is a game changer as the UK officially begins the process of exiting the EU economic bloc.
USOIL: (3.30PM) CRUDE OIL INVENTORIES: We may begin to experience the supply cut of Saudi on the U.S Inventory numbers going forth.

THURSDAY
EUR: (TENTATIVE) GERMAN PRELIM INFLATION; This will be a pointer to the EU Zone Consumer Price Index slated for the following day. A positive outcome could mean a positive outcome for the headline inflation report.
USD: (1.30PM) FINAL GDP; We will be looking out for this data to give us a heads up on how the U.S economy fared in Q4, though a lagging indicator but a surprise increase or fall in GDP would see a massive impact on the currency.
FRIDAY
JPY: (12.30AM) NATIONAL CORE CPI y/y & TOKYO CORE CPI y/y: HOUSEHOLD SPENDING; We will be looking closely at the NATIONAL CORE CPI looking for a sustainability in the positive trend in the CPI, last CPI came out for the first time in years in the positive region.
GBP: (9.30AM) CURRENT ACCOUNT/FINAL GDP: The Current account is expected to show a trend in reducing deficit as UK goods become attractive to the markets, the Final GDP will also throw light on the growth rate in the UK.
EUR: (10.00AM) FLASH ESTIMATE CPI y/y: We will be looking for further inflammation in the EUR CPI with a special focus on the core, as this could show us an improving economy, thereby forcing the European Central Bank to start reducing accommodation.
CAD: (1.30PM) GDP m/m: We will be looking for signs of growth as the spill-over growth effect from the US Economy wades into economic numbers from the LOONIE.
USD: (1.30PM) PERSONAL SPENDING/ PERSONAL INCOME: If growth is on a sustainable path, this numbers will prove it. Otherwise, it may further cast doubts on the growth trend in the U.S.
USD: (1.30PM) CORE PCE PRICE INDEX: This is the FEDZ measure for inflation, a pick-up in this data further supports the last week interest rate hike. A dip below the expectation means further weakness in the US.

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