Investors will have an opportunity to gauge the latest effects of the global trade slowdown and Brexit uncertainty on the UK economy as the Office for National Statistics (ONS) is due to release GDP and manufacturing output data today.
With an expected fall in GDP from 0.6 per cent to 0.2 per cent in the last quarter, the figures are likely to set the trading direction for the week. If they are worse than expected, I would expect sharp volatility for the Pound.
Theresa May has agreed to hold fresh talks with Jeremy Corbyn over his soft Brexit plans. In a letter to the leader of the Labour Party, the UK prime minister said “it is good to see that we agree that the UK should leave the EU with a deal” and that cross-party support sends a “powerful signal” to Brussels. However, she also said his plans to keep Britain in a customs union would present a “negotiating challenge” and that she wanted discussions to consider “alternative arrangements” to the Irish backstop.
Meanwhile, in Beijing the latest round of US-Chinese trade talks focused on intellectual property is under way. Over the weekend, US President Donald Trump said he wanted to call his Chinese counterpart Xi Jinping before the 1 March tariffs deadline, hinting the date could be postponed, which would allow for a meeting between the two leaders next month.
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