Brexit talks, US jobs data, Nafta's reworking
The FT's Aimee Keane looks at the week ahead's top stories, as the third round of Brexit negotiations begin in Brussels, the representatives of the US, Canada and Mexico gather for Nafta talks and US data on jobs are released on Friday.
Produced by Aimee Keane and Filip Fortuna. Filmed by Donell Newkirk.
Welcome to "The Week Ahead." Here are the stories we'll be watching in the next few days.
The third round of Brexit negotiations begins in Brussels. Representatives from the US, Canada, and Mexico will gather in Mexico City for the next instalment of NAFTA discussions. And we'll get a check on the health of the US economy with the August jobs numbers.
We'll start with Brexit negotiations. The third round of discussions kicks off in Brussels this week and it is expected to focus on three priority issues-- citizens' rights, the divorce bill the UK will pay to the EU, and the status of Northern Ireland. Henry Mance, our political correspondent has more from London.
The third round of Brexit negotiations kicks off in Brussels this week. And the focus is still very much on the three priority issues, so citizens' rights, the divorce bill that the UK will pay to the EU, and the status of Northern Ireland.
Britain has been trying to get more talk about the future relationships and trying to move discussions on more quickly. It says, you can't, for example, talk about the border in Northern Ireland on a temporary basis unless you know what it will be like on an ongoing basis. Brussels, on the other hand, is still waiting for details of how the UK wants to calculate its financial obligations, so its proposal about the divorce bill.
So I think we've seen positive noises on both sides. And a soft Brexit, or at least a softer tone on Brexit, is in fashion in London. But both sides really want more clarity and more detail at this stage.
Now to Mexico City, where the second round of NAFTA negotiations will take place later this week. The decades-old trade pact came under fire during the US election when then candidate Donald Trump called it a quote, "horrible disaster for the US" and threatened to pull out of the agreement. At a rally in Phoenix, Arizona last week, the US president revived his campaign threat, saying he didn't think a deal could be made.
And you know that one of the worst deals that anybody in history has ever entered into, we have begun formal renegotiation with Mexico and Canada on NAFTA.
Jude Webber in Mexico City has more on the continued NAFTA negotiations.
With Donald Trump's latest threat to pull out of the North American Free Trade Agreement ringing in their ears, negotiators from the US, Canada, and Mexico gather in Mexico City from September 1 to the 5th for the second round of talks on updating the 22-year-old trade pact.
As they delve deeper into their differences, which include the US trade deficit with Mexico, rules on regional content, low Mexican wages, and how to resolve disputes, Mexican president, Enrique Pena Nieto, delivers his fifth state-of-the-nation speech on September 2nd. Rising violence and mounting corruption scandals have overshadowed his party's prospects ahead of the July 2018 presidential elections.
Mexico's president will abandon the town hall format he used in last year's speech, where he fielded questions from an audience, and instead, will revert to a more formal speech at the National Palace.
And to the US economy. On Friday, investors will be watching for the latest indicators of the country's economic well-being. Data on consumer sentiment, manufacturing, and construction are due to be released.
And economists expect a 0.5% rise in construction spending for the month of July, following a 1.3% drop in June. Now, investors tend to read this data as a broader indicator of both business and consumer confidence in the economy.
But the most closely watched data that will be released on Friday will be the August jobs report. Economists expect US hiring to have cooled this month to 170,000 jobs, following better than forecasted job growth in both June and July. Unemployment, however, is expected to remain at 4.3%. Mamfa Badkar of Fast FT has more on what to watch for in the release.
Markets and the Federal Reserve will both be looking at the wage picture when we look at August jobs report. The reason markets and the Fed are focused on wage growth is because subdued inflation has been an obstacle to the Fed as it tries to determine its outlook for interest rates. The minutes of the Federal Reserve's July monetary policy meeting showed that policymakers are divided on where inflation stands. And a handful of Fed officials have spoken out and said subdued inflation is a reason to leave interest rates on hold. What the Fed is expected to see is that, as the economy approaches full employment, wages and inflation should gradually start to pick up.
And that's what "The Week Ahead" looks like from the FT in New York.