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Week Ahead (18 November)

Tuesday 19 November, First TV debate between Johnson and Corbyn

With surveys showing that the public believe Johnson (net approval of -6%) is more suited to becoming Prime Minister than Corbyn (net approval of -42%), Conservative strategists were pleased when ITV decided on a one-on-one debate, where Johnson will have the opportunity to hammer home his advantage through superior debating skills.

In our view, this format will give Corbyn the opportunity to explain Labour’s plan for the economy which many voters, regardless of their view of Corbyn, regard as common sense, according to opinion polls. Furthermore, had the Liberal Democrat leader Jo Swinson been allowed to participate, Corbyn would have had to spend a lot more time defending his ambiguous Brexit policy. Now, he has the opportunity to win round Remain voters by presenting Labour as the only viable route to a second referendum. He will also hope to further erode the Conservatives lead on Thursday when he unveils the Labour party manifesto.

Wednesday 20 November, Irish banks on high alert for further admonishment from Central Bank of Ireland when Governor Gabriel Makhlouf speaks at the Waterford Institute of Technology

On Tuesday, at the Irish Banking and Payments Federation conference, Irish Central Bank Deputy Governor Ed Sibley criticised Irish banks for selling loans to funds and for offering lower interest rates to new customers than existing customers.

Given the scale of the reaction to Sibley’s speech within banking circles, Irish banks will be paying close attention to Gabriel Makhlouf’s first speech as Governor on Wednesday for signs of a carrot to Sibley’s stick. Makhlouf has already agreed to a Sinn Fein request that the Central Bank of Ireland investigate price discrimination in the Irish insurance industry.

Thursday 21 November, October ECB meeting minutes to be published with Christine Lagarde to make first official speech as President of the Governing Council the following day

The September ECB minutes reflected an unusual level of dissent among ECB Governing Council (GC) members. We noted at the time that the unprecedented public criticisms from northern European member states may have represented concerted action to prompt a reversal of Draghi’s loosening once Christine Lagarde takes office on 1 November. Lagarde will give her first speech as Governing Council President on Wednesday where she is expected to address calls from within the GC for an overhaul of how monetary policy is formulated with some calling for formal votes on setting interest rates.

A notable feature of the September minutes was an absence of any significant discussion around potentially raising issuer limits, which will almost certainly be required if the open-ended QE programme announced in September is to run beyond 9 months. Market observers will be keen to see if this topic arose during October’s deliberations.

Thursday 21 November, OECD to hold two-day public consultation on tax reform

As part of its ‘Pillar One’ initiative, the OECD is taking steps to amend international tax practices so that multinationals pay more tax in the countries where they make money, rather than where they are located. These rules threaten the model of smaller tax friendly jurisdictions such as Ireland and Luxembourg. Unsurprisingly, the proposals have attracted public submissions which will be discussed in Paris this week.

Friday 22 November, Flash estimates of November manufacturing PMI figures for France and Germany

Although Germany narrowly managed to avoid recession in Q3, its manufacturing output is expected to remain deep in contraction territory. October saw the tenth month of contraction while the rate of job losses accelerated to its fastest pace since January 2010. Things look much better in France which has seen its manufacturing PMI remain in expansionary territory over the past quarter.

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