Brexit, GDP data and central banks set the tone for the week
Fiona Cincotta October 28, 2019 10:36 AM
Monday will bring two crucial decisions for Brexit. Firstly, the EU is due to decide on an extension of the October 31 deadline and is expected to grant a delay until the end of January. Secondly the PM will put his general election proposal in front of MPs.
Sterling spiked as soon as London markets opened, positioning itself for Boris Johnson winning approval for a December election but reality started sinking in quickly, especially the fact that the Prime Minister still needs to win a two-thirds majority for the election to go ahead.
The FTSE traded lower weighed down the most by HSBC after the bank reported a 24% drop in quarterly profits.
Bond markets will have a busy week both in the US and in Europe with central bank meetings and GDP stats lined up for Wednesday and Thursday. Mario Draghi will hand over the helm of the ECB to Christine Lagarde just as the European GDP data is expected to show that the bloc's economic growth has almost completely lost any pulse.
The Fed is widely expected to opt for another rate cut on Wednesday but with the US economy also showing signs of cooling, a follow-up cut seems unlikely. The dollar is losing ground to the euro and the pound but is just about holding up against the yen.
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