Market Movers ahead
US-China trade talks will continue next week when Treasury Secretary Steven Mnuchin and US Trade Representative Robert Lighthizer travel to Beijing early next week. While Trump has hinted that a deal before 1 March is unlikely, we are not surprised and stick to our view that we will get a deal eventually.
Q4 GDP data for Japan, Germany and the UK is due out. We think Germany avoided slipping into a technical recession and in the UK, the growth picture has become weaker due to Brexit uncertainties and slower global growth.
In the euro area, look out for new car registrations in January, as the car sector has been one of the weak spots in the euro area economy. A rebound in car production/sales is one of the ingredients for a rebound in euro area growth.
In the UK, the MPs will have an indicative vote on how to proceed with Brexit on Thursday.
We may be heading for a new government shutdown from Friday if President Trump and Congress do not agree on a budget.
Weekly wrap-up
With less than two months to go, the UK remains divided over Brexit.
The European Commission has slashed its 2019 growth forecast for Europe. On a more positive note, signs of a German car sector recovery are getting more abundant.
The Bank of England remained on hold but still signalled a tightening bias despite Brexit uncertainties.
This week, equity markets remained supported by signs of a resilient US economy, a softer Fed message and a decent earnings season.
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