Over the weekend the pound came under strong selling pressure. According to newspaper reports on Sunday morning the Prime Minister is expected to say that the UK is prepared to leave the Single Market customs union and the jurisdiction of the European Court of Justice , as she pushes for an end to free movement of labour in negotiations with the Eurozone. This strong stance would formalise May's previous comments last weekend that the UK will pursue a hard Brexit, opting out of the EU single market.
Federal Reserve Chair Janet Yellen said the U.S. economy faces no serious short-term obstacles, however she stated that the US must address the important long-term challenges of low productivity and growing inequality. Yellen insisted that improving productivity is the key determinant of improving living standards over the long term. She also said the said a greater share of income gains were going to workers with higher education, causing inequality to rise in the U.S.
Sales at U.S. retailers rose less than expected in December, finishing the year on soft note indicating that economic growth could have been weaker in the final quarter of 2016. Sales were led by another solid performance among auto dealers, who set a record in December. The uptick in auto-sales was helped in part by big discounts to attract buyers during the holiday season.
Consumer confidence was largely unchanged in January from its highest level since the start of 2004, showing Americans are still optimistic that Donald Trump’s fresh economic policies will encourage growth. The University of Michigan said Friday that its preliminary index of sentiment came in at 98.1, after 98.2 print in December.
10:00 - EUR: Eurozone Trade Balance (Nov) Expected to improve to 23.2B from 19.7B
18:30 - GBP: BoE Governor Mark Carney makes a speech.