What to expect in the upcoming trading week - 04.12 - 08.12.2017

What to expect next week - Next week can start quite strongly, especially for the euro and European stocks, if in Germany, the Social Democrats and the Christian Democrats come to an agreement on the formation of a government. If the weekend comes to that, we can expect an upward trend in both the EUR and the DAX30 on Monday.

In Britain, Prime Minister Theresa May reached an agreement with the EU on Brexit. It has become clear that the amount the UK has to pay for leaving the bloc remains within the range of 45 billion to 55 billion euros. So far, exit costs have been a major stumbling block before Brexit Deal and an agreement will pave the way for the next stage of the negotiations. The two remaining key pillars, on which a solution needs to be reached before the next negotiations are launched, are the border with Ireland and civil rights after the separation. The pound remains highly sensitive to this issue, with expectations that there will be news about the progress of the deal during the week. Every one in a positive light would have a strong appreciation of the local currency, while a failure of the negotiations at any point would send the sterling to new bottoms. According to Theresa May, the border with Ireland is a key point without which no progress can be made.

Next week, fateful news are also awaited in the United States. There, President Donald Trump continues to struggle with the Senate to successfully pass the Bill on Tax Reform. These reliefs are widely expected by investors, and some of the positivism they will bring to the economy are reflected in the dollar and US indices. However, if all goes well (as expected) there will be a new upward momentum on the dollar and indices. The US indices have not recorded a new record in December for the past 10 years, and this is a prerequisite for the negative tradition to be spoiled. From the last hours of a trading week, it was rumored that Michael Flynn would cooperate with the FBI on their investigation into Trump's pre-election ties with Russia. These rumors have shaken the markets, with Dow dropping more than 350 points within an hour. As the situation unfolds in the new week, we can expect new huge movements from indices and dollars. Moods remain highly volatile, as the situation around the Trump Tax Plan remains vague and there may be surprises. The details of the agreement between Trump and the Senate also depend, as accepting but postponing the relief will be seriously negative for the markets, and with them the FBI investigation may lead to major market turmoil. Investors remain cautious and expect more clarity on issues before deciding on their positions.

Monday
11:30 UK - Construction PMI
17:00 USA - Factory Orders

Tuesday
02:30 Australia - Retail Sales
05:30 Australia - RBA Interest Rate Decision
11:30 UK - Services PMI
17:00 USA - ISM Non-Manufacturing PMI

Wednesday
02:30 Australia - GDP
15:15 USA - ADP Nonfarm Employment Change
17:00 Canada - BoC Interest Rate Decision

Thursday
02:30 Australia - Trade Balance
17:00 Canada - Ivey PMI

Friday
01:50 Japan - GDP
11:30 UK - Manufacturing Production
15:30 USA - Nonfarm Payrolls

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