In Europe, political risks are one of the themes this week. Germany’s CSU leader and interior minister, Horst Seehofer, offered to resign after the migration deal at the EU summit last week.
Chancellor Merkel is due hold an emergency meeting with him today.
In the UK, the focus will be on the Chequers Cabinet meeting on Friday to hammer out an agreed post-Brexit position. Media reports suggest a third customs option, yet to be detailed, will be debated.
The key UK data releases this week will be the PMI reports, starting with the manufacturing survey today, followed by the construction and services reports on Tuesday and Wednesday, respectively. Also, on this week’s agenda is Bank of England Carney’s speech in Newcastle on Thursday.
UK Manufacturing came in at 54.4 beating the consensus forecast is for a small decline to 54.0. Overall, the survey evidence points to a return to quarterly manufacturing growth in Q2, following stagnation in Q1.
Eurozone June manufacturing PMI reports are also due, but they are expected to confirm the preliminary ‘flash’ estimate of 55.0. That would reaffirm the slowdown from the very strong pace of output growth towards the end of last year. Eurozone unemployment is expected to be unchanged at 8.5%.