Attention shifts back to the dollar and US interest rates this week as the minutes from the last FOMC meeting are released. Meanwhile, flash PMI readings, GDP estimates and a batch of corporate earnings will provide plenty of action.
The Federal Reserve left interest rates on hold at its May meeting but left the door wide open to hike in June. Market expectations are running high with the US central bank very much odds-on to increase the federal funds rate by 25 basis points.
With no press conference following that meeting, attention is very much on the minutes, which are to be released at the usual time of 19:00 (BST) on Wednesday. Markets will be eyeing what officials made of the relatively lacklustre Q1 GDP reading and where they stand on trimming the balance sheet.
Tuesday sees the monthly flash estimates for the manufacturing and services sectors in the Eurozone, which ought to give markets a pretty good read on where Q2 growth is going. Following a rise in growth and inflation there is mounting pressure on the European Central Bank to start thinking about tightening.
GDP Second Estimates
Staying on GDP and the second estimates for the first quarter GDP from the UK and the US. Both delivered uninspired numbers in the first reading so markets will be on watch for a potential upwards revision to the figures. UK growth slowed to a measly 0.3% in the first quarter, while in the US it was a fairly meagre 0.7%.
On the corporate front Wall Street is nearly done with Q1 earnings but there are a number of UK blue chips in action that could drive the FTSE 100. Kingfisher and Marks & Spencer are two of the highlights and these should also give fresh insight into the state of UK domestic demand and consumer spending, which the Bank of England warned earlier this month is waning.
Source: ETX Capital