Week Ahead (25 January)

Tuesday, 26 January - UK labour market data to be released

The Office of National Statistics will release data this week covering the UK labour market's performance to November 2020. In December's data release, the UK employment rate was estimated at 75.2%, 0.9 percentage points lower than a year earlier and 0.5 percentage points lower than the previous quarter. The statistics also showed that between August and October 2020, 32.52 million people aged 16 years and over were in employment, representing 280,000 fewer than a year earlier. This was the largest annual quarterly decrease since Q1 2010.

The ONS data comes after a Centre for Retail Research report forecast an 18% rise in closures this year which could result in up to 200,000 job losses.

Wednesday, 27 January - New Greek bond auction to be held

The Greek government will auction 26 week T-Bills this week as part of its commitment to raise up to €12 billion by selling short and long-term debt in 2021. In a pre-Christmas auction, the sale of three-month treasury bills raised €812.5 million, extended from the original issuance of €625 million due to demand; the bond was 2.38 times oversubscribed. Non-competitive bids totalling €187.5 million brought the amount raised via these sales to €1 billion.

In December the benchmark 10-year bond yield fell to a record low of 0.606% on foot of the deal struck between EU member states on a new multiannual financial framework and recovery fund. It has remained at low levels since then and is currently 0.679%.

Wednesday, 27/Thursday, 28 January – Vote on Bonafede-Justice decree to test Conte

Following last Tuesday evening’s confidence vote in the Senate, where he secured the support of 156 lawmakers, including 3 life Senators at the behest of President Mattarella, Prime Minister Conte is in a precarious position.

The first significant test for Conte will be the Senate vote on the Bonafede-Justice decree, scheduled for Wednesday or Thursday – a decision will be taken later today. Should the 18 Italia Viva Senators, who abstained in the confidence vote last Thursday, vote against the bill, then it is doubtful that Conte can survive unless he secures the necessary 161 votes elsewhere. The door remains open for Italia Viva to be brought back into the coalition but it is far from certain as to whether Conte would remain at the head of such an arrangement.