In view of analysts at Danske Bank, markets will keep a close eye on Theresa May's speech on Brexit in Florence this afternoon, where she will outline the details of the UK's negotiating stance after the UK formally leaves the EU at the end of March 2019.
Key Quotes
“Yesterday, parts of May's speech was already leaked and among other things it was confirmed that May will propose a two-year transition period after Brexit takes effect.”
“Today, we have a busy data calendar, not least with PMI figures released in Germany, France and the euro area. We expect euro area manufacturing PMI to remain strong, but moderate slightly to 57.2 in September, as the euro appreciation is bound to drag on export orders eventually, despite activity so far remaining strong. We look for a similar decline in the Service PMI due to weaker signals from the new orders component in the last reading, and forecast service PMI at 54.2 in September.”
“The market will also have plenty of ECB speeches to digest as Mario Draghi, Benoît CSuré and Vítor Constâncio are all scheduled to speak.”
“In the US, Markit PMI manufacturing is due to be released, which we estimate will show a further increase given the recent large disparity between ISM manufacturing and Markit PMI manufacturing (58.8 versus 52.8). Again, however, numbers might be somewhat skewed due to the impact of the recent hurricanes.”
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