Can US consumers weather Brexit concerns? – Danske Bank

Research Team at Danske Bank, suggests that today's calendar is dominated by US releases as Markit Service, Composite PMIs, new home sales and Conference Board consumer confidence data are all due out.

Key Quotes

“Market focus will in particular be on whether US consumers can weather Brexit concerns given the preliminary July drop in the University of Michigan's (UoM) consumer sentiment was explained largely by the UK's vote (see UoM's explanation here and tweet for graphical illustration). We think consumer optimism will remain high, especially as equity markets have held up well, supporting our view of the US economy being driven by domestic demand. The first release of US Q2 GDP is due out on Friday.     

For markets, the big question is the time needed by the FOMC to evaluate the full effects of Brexit amid both the US economic surprise index and US equity markets hovering close to record highs. We expect the Fed to deliver a 'wait-and-see' message at tomorrow's July meeting but risks are skewed towards a slightly hawkish signal, a stronger USD and lower commodities, in our view.”