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The White House readies itself to welcome UK Prime Minister Theresa May today. She is the first leader to meet the new US president, and there is already a lot of anticipation and contrasting views in the media on the meeting. Mrs May is ambitious, and wants to try and secure a free trade deal with the US, post-Brexit. This is a very early meeting where nothing will be set in stone, but it will be nonetheless interesting to hear from the two leaders.
Market news
Over to the markets, yesterday we learnt that in the UK, strong consumer spending has supported growth over the past three months and this has helped the UK to grow at the end of 2016, beating the dampening impact of the Brexit vote.
The services sector continues to be the driving force behind the UK economy in recent quarters, but many analysts are still worried that 2017 will be a more testing year for the UK economy as consumer spending is likely to be squeezed by rising inflation. Nonetheless, the data yesterday was very encouraging, as the UK was again the fastest growing G7 economy in 2016, with GDP growing by 0.6% quarter on quarter in the final three months of the year.
Over in Germany, the GFK consumer confidence reading for February improved more than expected, printing 10.2 against an expected 10.
In the US the day was busy, with flash PMIs for January beating expectations and improving month on month to 55.1 against an expected 54.4. Labour market data was slightly disappointing, with initial jobless claims rising more than expected to 259k. New home sales for December also disappointed at 536k, against a market expectation of 588k.
Data to come
Looking at today’s calendar we start in Europe, with December M3 money supply numbers and January consumer confidence out in France.
In the US, Q4 GDP are scheduled for release, together with preliminary data on durable and capital goods orders in December. The last piece of data will be the final University of Michigan sentiment reading for January. All in all it will be a fairly busy end to the week with Trump-May meeting providing the backdrop to it.
