Unless there are unexpected comments from the key Federal Reserve officials, US political developments are liable to overshadow economic developments with further uncertainty surrounding the investigation in to the US Administration and President Trump’s next moves.

US

The main US economic data releases are concentrated late in the week with the first-quarter GDP revision and durable goods orders data due on Friday after the regular jobless claims data on Thursday. Existing home sales data is due on Wednesday.

The Federal Reserve minutes from May’s Policy meeting are likely to be the most important scheduled event of the week.

Any comments from Fed speakers will need to be watched very closely given the potential guidance for the June policy decision. At the moment, only Brainard of the Fed Governors is due to speak during the week.

Former Fbi Director Comey was due to testify to the Senate intelligence on Wednesday, although this is now uncertain given the appointment of a special counsel into the ongoing enquiry into allegations of Russian involvement with Trump’s 2016 Presidential election.

The investigation into the US Administration will inevitably be a key focus during the week while any move to appoint a new FBI Director would also be important.

UK

The UK data releases are unlikely to have a major impact during the week with the latest government borrowing data and revised first-quarter GDP data.

Markets will monitor the UK General Election campaign and commentary on Brexit negotiations. Although the impact is likely to be measured until after the June election, the underlying EU stance will be an important element.

Any shift in opinion polls suggesting a further narrowing of the Conservative Party lead would tend to unsettle Sterling.

Euro-zone

The Euro-zone PMI data will be an important focus during the week given the potential impact on ECB Monetary Policy expectations. If there is further evidence of acceleration in growth and upward pressure on prices, there will be additional pressure on the ECB to move towards a shift in policy guidance.

Commentary from ECB officials will continue to be monitored closely as the internal debate intensifies ahead of a crucial June meeting.   

International

Trends in oil and commodity prices will also be an important focus after further volatility over the past week, especially with the crucial OPEC meeting due on May 25th. Markets are expecting that OPEC will agree to extend production cuts for a further nine months.

The Bank of Canada will announce its latest monetary policy decision on Wednesday with commentary on the housing sector watched closely.

Forecasts

Proposed reading:

• More recent news
• 2017 Economic Calendar
• Today’s Foreign Exchange Rates

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