Thursday preview: Yellen speaks amid expected Trump attacks
While some UK investors will be keeping an eye on official retail figures, the amount of market emotion tied up in the American political and economic transition means the first speech from Federal Reserve chair Janet Yellen since the election will be microscopically examined.
The central bank chief, whose position has been attacked many times in the past by President-elect Donald Trump, will address Congress's joint economic committee.
"There are presently so many unknowns with respect to US fiscal policy projections that it is very difficult to draw strong conclusions about a Trump presidency will change the landscape for the Fed," said Jane Foley at Rabobank.
"That said, as a rule central banks dislike volatility and in this context it is possible that Fed Chair Yellen may use her testimony later this week to calm the market."
Joachim Fels, Pimco’s global economic advisor, suggested overnight that the speech will be of interest in light of the expectations that central bank independence is likely to come under further attack under a Trump administration.
"At a minimum, the new administration is likely to appoint two hawkish candidates to the two vacant seats on the Federal Reserve Board. Also, a new Fed chair might be appointed when Janet Yellen’s term at the helm expires in February 2018. All of this would be common and legitimate practice and does not, per se, constitute an attack on the Fed’s independence. However, it remains to be seen how closely the policy promoted by any new appointees will hew to the new administration’s views.
"More importantly, the Republican majority in Congress may well start to push forward some of the proposals to narrow the Fed’s mandate that conservative circles have made in the past. The mere rumor of changing the Fed’s mandate may have an impact on monetary policy decisions."
Trump is also due to meet Japanese leader Shinzo Abe in New York, talking trade and other issues.
Foley suggested this "could bring some indication as to how far Trump intends to push his campaign pledges regarding issues such as the possibility of Japan acquiring nuclear arms and further increasing its contribution for the upkeep of US forces on its soil".
Among the dump of US data due at 0830 Eastern Standard Time on Thursday includes jobless claims, which are expected to nudge up to 257K from 254K, while US consumer prices are forecast to rise 0.3%, boosted by higher gas prices, to leave the year-over-year rate at 2.2%.
Housing starts and the Philadelphia Fed Survey are also due at the same time.
Back in the UK, retail sales data is due from the Office for National Statistics at 0930 GMT, with the consensus forecast for a 0.4% month-on-month rise after the flat reading last time.
The British Retail Consortium's research showed like-for-like sales values rose to 1.7% in October, from 0.4% in September, while the CBI Distributive Trades Survey’s reported sales balance rose to its highest level since September 2015.
Among London-listed companies, Royal Mail is due to report first-half results. Analysts at UBS forecast revenue up 3.1% to £4.53bn, adjusted EBITDA pre-transformation costs of £570m, adjusted EPS of 19.9p, stated EPS 10.5p and DPS 7.4p.
"The key issues will be the outlook for parcel volumes and pricing into 2017, the progression of letter mail volumes and effectiveness of cost control," they said.
On building materials group CRH, which is due to report a third-quarter update, UBS expects like-for-like sales growth to slow to 3% from 7% in the first half, given the tougher comps and partially challenging weather conditions in the US.