1. Jon Cunliffe talks: Monday, 6:30. The Deputy Governor of the Bank of England will speak in a conference in Istanbul, Turkey, and may provide insights into the global economy and the economic situation. He will likely dodge the sensitive topic of Brexit.
  2. ECJ ruling on Article 50: Monday, around 8:00. The European Court of Justice will issue its official ruling on the revocability of Article 50: the exit clause out of the European Union. After the General Advocate opined that the UK can do it unilaterally, the court is expected to approve this opinion. Such a ruling will encourage pro-Remain voters and MP’s in the UK to try and stop Brexit, probably via a “People’s Vote” or second referendum. The government is unlikely to change its position.
  3. UK GDP: Monday, 9:30. The UK switched to publishing monthly estimates for its GDP growth earlier in the year. The publication for September was somewhat disappointing with 0% growth. Nevertheless, Q3 saw an upbeat expansion. We will now receive the first insight into Q4 with the publication for October. The outcome will feed into the Brexit debate. GDP is expected to rise by 0.1%.
  4. Manufacturing Production: Monday, 9:30. Alongside the GDP report, the UK publishes the components of growth, with manufacturing standing out. The sector was projected to benefit from the weaker exchange rate but did so only partially. After an increase of 0.2% in September, the output is expected to be flat in October. The broader industrial output is expected to drop by 0.4% after remaining flat beforehand.
  5. Goods Trade Balance: Monday, 9:30. Britain has a chronic trade deficit. However, it squeezed just below 10 billion pounds in September, standing at 9.7 billion. A fresh widening to 10.5 billion is projected for October.
  6. Jobs report Tuesday, 9:30. As members of Parliament will get ready for the vote, they will have another top-tier indicator to ponder into and so will Sterling traders. Wages remain of high importance to the pound and also to the BOE. Average Earnings accelerated to 3% y/y in September, an encouraging development. The same rate is on the cards for October. The unemployment rate disappointed with a small increase to 4.1% that month and no change is expected. Another shortfall was seen in the Claimant Count Change, or jobless claims, for October which rose by 20.2K, above projections. We will now get fresh figures for November which are expected to show an increase of 13.2K.
  7. Parliament votes on Brexit: Tuesday, the exact timing of the vote is unknown at this point. UK PM Theresa May reached an agreement on the withdrawal of the country from the European Union. And now, Parliament will have its “meaningful vote” on the accord. The deal ends free movement of people and secures the rights of citizens but the agreement on the “Irish backstop” is criticized by many. It ensures an open border in the Emerald Isle but ties the UK to EU regulations. Under the accord, the UK leaves the EU on March 29th, 2019, but remains in an implementation phase until at least the end of 2020. The government lost the support of the Northern Irish DUP on which it relies and many pro-Brexit members of May’s Conservative Party stated they will vote against the accord. Several opposition Labour members may support her. At the moment, it seems that the government will fail to pass the deal. In this case, the Pound may suffer quite a bit, alongside stock markets. The expectation is that the UK will then return to Brussels, achieve a few minor concessions and return for a second vote. The tweaks and the rout in financial markets would then convince members to vote for the deal. Other scenarios include the passage of the deal in the first vote, a pound-positive development that is not priced in. A third scenario is a significant defeat for the government that would clarify there is no chance for a second vote. In this case, there are growing chances of a no-deal Brexit, which would be devastating for the pound, general elections in which Labour’s Jeremy Corbyn could become PM, a second referendum, or a reversal of Brexit. In this scenario, only uncertainty and high GBP volatility are guaranteed.
  8. RICS House Price Balance: Thursday, 00:01. The Royal Institution of Chartered Surveyors showed a deteriorating situation in the housing market in the past two months, with the balance between surveyors reporting price decreases overtaking those that report an increase. After a level of -10% in October, a level of -9% is expected for November.
  9. CB Leading Index: Friday, 14:30. The Conference Board’s composite index uses seven different indicators. Back in September, they showed a decline of 0.4%. Another slide cannot be ruled out for October.

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