The week ahead will see a continuation to the Brexit storyline as reports confirm that the UK’s Supreme Court will be giving its verdict on the High Court decision in November. Elsewhere, Australia and New Zealand will be releasing the quarterly inflation figures while the U.S. and the UK will see the preliminary GDP numbers for the fourth quarter. Here’s a quick preview of what to expect from the markets this week.
UK Supreme Court to rule on High Court Decision
On Tuesday, the UK’s Supreme Court will be announcing its verdict on the High Court’s decision made in November, to which the UK government had appealed. The Supreme Court’s decision is expected to be in favor of the High Court ruling, which in November said that the Brexit referendum must be put to a parliamentary vote.
The news is likely to see the British pound spike higher in the near term however it is turning out to be increasingly likely that the parliament will not be opposing the Brexit verdict, especially after last week, the British Prime Minster Theresa May outlined her vision for Brexit and also promising to put the entire Brexit deal to a parliamentary vote.
UK GDP y/y 2.2%, Q3 2016
Besides the Supreme Court’s hearing, the UK’s advance GDP report will be coming out this week which will be another main event risk for the British pound. Expectations are pointing to a 0.5% increase in the fourth quarter, slightly below the 0.6% quarterly GDP growth seen previously in the third quarter.
Germany Ifo business climate expected to rise
The Ifo business climate in Germany is forecast to rise to 111.3, following the previous reading of 111.0 in December. The Ifo business climate data in December already hit a 34-month high and a reading of 111.3 would continue to show strengthening in the index. Germany’s Ifo business climate increased on account of an uptick in the trade and industry sector which showed the strong reading for 2016. Manufacturing confidence had also improved as companies expected output to strengthen in the coming months.
