May fighting for her political life After rumors spreading over the last few days that Theresa May might resign, the British Prime-Minister is likely to have a tough week ahead of her. Pressure from her own party to set a date of resignation, which would arguably help her win support for her Brexit deal, is expected to resume over a Cabinet meeting today. Also this Monday, elected lawmakers will analyse the current situation and expose their positions on all possible scenarios currently on the table, in so-called “indicative votes”. The UK was supposed to have left the EU last Friday. Instead, the process is far from being resolved and the probability of a new referendum has surged as the Chancellor of the Exchequer, Philip Hammond, refused to rule out that possibility, saying it was a “perfectly coherent proposition”. The next few days should give us more hints on the likeliness of all potential outcomes. Dovish FED and the yield curve The FED took the decision of setting rate hikes to zero this year, after a meeting last week. Subdued inflation and a slowdown of economic growth have led US monetary policy officials to expose their dovish stance. Moreover, later last week the gap between 3-month and 10-year Treasury yields became negative, a phenomenon often assumed to precede recessions and therefore used by many analysts for forecasting purposes. Markets are expected to react over the upcoming week in response to increasing signals of a future turn of the global economic tide.
The ECB’s President, Mario Draghi, is delivering a speech this Wednesday
On Thursday, the US Bureau of Economic Analysis is releasing final figures on the evolution of annualized GDP over the last quarter of 2018