Brexit dominated headlines last week following Theresa May triggering Article 50 on Tuesday. The timing of this was well guided so there was not a significant market movement from the action. However, traders were interested in learning the tone of Mrs May’s letter, giving a guide on how the British might approach the negotiations. Likewise, Donald Tusk’s response was carefully analysed. The main sticking point has been the order of negotiations, with the EU determined to agree on the terms of exit before beginning discussions on a future trade agreement. Given the EU’s stance, this is the most likely pathway.

ONS figures released on Friday showed that the UK current account balance narrowed sharply to £12.1bn, in the final quarter of 2016. The majority of the move has come from an improvement in the net trade position which tightened, following a significant increase in exports. Further improvements were also seen in the net investment position. The driver of these changes has been the movement in the value of the pound against major trading partners. This has made UK products more attractive to domestic and international consumers and sterling earnings on UK international investments more profitable. Whether this is a one-off move or the start of an improving trend remains unclear.

Japanese inflation figures for February were released last week showing that prices increased 0.3% over the year, in line with expectations. While inflation remains persistently low policy makers will be relieved that the rate remains positive and that rising global inflation rate should add upward pressure on the rate going forward. Japan has been inflicted with deflation for much of the last 20 years, and the central bank remains committed to breaking this cycle. They have already unleashed the largest amount of quantitative easing in the world and are willing to extend it if necessary.

US manufacturing PMI and non-farm payrolls are released on Monday and Friday respectively, as well as the UK Trade balance.