Econoday Unplugged

Amid Brexit fallout that includes a new prime minister, the Bank of England is expected to cut rates with the ECB to take its cue from moves in sterling. It's slow growth in the U.S. and slowing growth in China.

Businesses and markets may not like it but prolonged uncertainty is the outlook given the leadership upheaval in parliament and when -- or perhaps if -- article 50 is invoked and the U.K. begins to break away. In the meantime, it's wait and see for July data and the first economic effects which won't begin rolling out in bulk until next month.

Polls are suddenly swinging in favor of Brexit, putting monetary policy on hold and global markets in reverse. Coordinated central bank action on a "leave" vote, if any, would likely take its cue from the Bank of England.

May's weak employment report is hopefully just a one-month aberration though it has dimmed the U.S. economic outlook and lowered rate-hike expectations. Brexit dominates the European discussion amid complete uncertainty over the outcome of this month's vote and the scale of its impact effect if passed. In Asia, global slowing is keeping Australia policy in check with a rush of Chinese data to keep investors busy this week.

Global central banks will have a slew of new economic data as input to their decision-making process. U.S. data will be closely monitored with a Fed decision looming in two weeks. But in Europe the Brexit decision is outweighing data considerations for now.

Brexit may be slowing expectations for European growth but the latest polls are pointing to no exit for the U.K., reflected in gains underway for the pound. Action in the U.S. is definitely coming alive as new home sales, in the latest sign of consumer confidence, posted a giant gain and talk builds for a June FOMC rate hike. Still, global growth is generally low, a concern for the G7 which is urging nations not devalue their currencies.

China is bottoming and has yet to pick up while Europe's economy continues to disappoint with Brexit becoming an increasing wildcard. The news is slightly better in the U.S. where the consumer, presidential election and all, is spending once again.

Global central banks have been cutting the number of their policy meetings, generally to 8 a year. Is this enough time to gauge changes in economic trends or assess changes in market direction?

It's the global GDP season which brings to light the differing measures between nations not to mention the differing results with Europe doing better, China slowing, and the U.S., where productivity is weak, stalled.

Growth is slow in the U.S. and there's no expectations at all that the Fed will cut rates at this week's meeting. Growth is even a bit slower in Europe and isn't expected to get much immediate lift from the ECB's latest expansion of its quantitative easing program. And news will be especially heavy from Japan where a run of key data will be posted this week along with the Bank of Japan's latest decision which, despite the major earthquake, may or may not see a deepening in negative policy rates.