It looks like we are heading into what could potentially be a big week for trading around the world between a flood of economic and earnings reports and political developments. The shockingly low US GDP report of only 0.7% growth combined with rising inflation has put the Fed into a bind and raised the profile of this week’ meeting. Previously this was a non-event with the Fed on track to raise interest rates in June. Traders may now look to the May meeting statement for clues as to whether a June hike is still on or if the Fed is rethinking its program. Anything less than a full commitment to a June hike could be seen as dovish. ADP and nonfarm payrolls may be assessed through the same lens, what they mean for a June hike. Politics may impact trading again to start the week. The week kicks off with market reacting to the EU summit. Traders may react to how hard line a stance the EU takes and if reports of the EU encouraging/supporting Irish reunification are true which could create a big mess in a big hurry. With PM May holding a big lead in UK election polls, the risk that Brexit talks could become unstoppable force meeting immovable object has been growing. GBP has been climbing relative to USD and EUR with PM May leading in the polls by a big margin. This is also the last week of campaigning before the second round of French Presidential voting. Last week’s action has priced in a Macron win but if Marine Le Pen picks up momentum we could see more volatility in the Euro and European indices. In the US, Congress continues negotiations on a short-term funding measure to kick the big showdown and possible government shutdown off to the fall. Because domestic politics could force the Fed to skip September, it needs to raise rates in June to stay on course for 3-4 hikes this year. Meanwhile, we could see more posturing and threats related to North Korea and trade with NAFTA still in focus which could impact trading in CAD and MXN. Stocks continue to move through the peak of earnings season with another flood of reports, but the focus moves to small and mid-caps. Some of the top names reporting include Apple, Facebook and Tesla. If the Dow and SPX continue to fail to break out to new highs on strong earnings, it could be a sign that the seasonal Trump honeymoon trade may be ending. Economic news (North America time): Saturday/Sunday China manufacturing and non-manufacturing PMI EU summit on Brexit Manufacturing PMI Asia Pacific countries Monday Manufacturing PMI for US and Canada Most European markets closed US personal income/spending, construction Monday evening Australia RBA (no change expected) Tuesday Manufacturing PMI for UK and Europe Tuesday evening Service PMI for Asia Pacific countries Wednesday US FOMC Meeting US ADP Payrolls, non-manufacturing PMI Eurozone GDP Thursday US and Canada trade balance US factory orders Service PMI for UK and Europe Bank of Canada Poloz speaking Friday US nonfarm payrolls Canada employment, Ivey PMI FOMC Rosengren, Williams speaking Sunday 7 France Presidential election run-off round Earnings Reports: Monday none Tuesday Apple ConocoPhillips Merck Wednesday Facebook Tesla Motors Time Warner Thursday CBS Friday none