The only notable release is the second revision of US Q3 GDP

Market movers today

• A light data calendar today. The only notable release is the second revision of US Q3 GDP. Growth is expected to be revised slightly higher from the first estimate of 4.2% q/q (ann.), reflecting that private consumption has been stronger than previously reported.

• We also have a couple of ECB speeches. The governor of the central bank of Belgium, Luc Coene, is scheduled to speak at 12:15 CET and the governor of Bank of Latvia, Ilmars Rimsevics, is scheduled for 13:00 CET. Focus is on a possible soft target for the size of the ECB’s balance sheet.

• There are a number of potential rating announcements today. It cannot be completely ruled out that Fitch will put a negative outlook on its current triple-A rating of Finland in light of the recent deterioration in Finland’s growth outlook. S&P could potentially announce a rating decision on Sweden and Austria and Moody’s might announce a rating decision on ESM and EFSF.

• Yesterday we published Nordic Outlook – our quarterly publication providing an indepth overview of the economic situation across the Nordic countries.

Selected market news

A global risk-off move saw equities down more than 1.5% in the US, 10Y US Treasury bonds rallying by 6bp and the dollar gaining against most major currencies.

As a result of the recent equity sell-off, the MSCI world index has now given back twothirds of its August rebound. There was not much news to drive the market yesterday, but risk assets were affected by the story that a member of Russia’s ruling party had drafted a law proposal that would allow the seizure of foreign assets.

Positive economic data out of the US were not enough to stabilise markets. The US durable goods report covering August was actually decent and showed a continued positive trend in core capital orders. Initial jobless claims also continue to hold on to very low levels and, in general, there have not been many periods historically when jobless claims have been lower as a share of the workforce.

However, global risk sentiment is affected by the fact that two of the other key regions, Europe and emerging Asia, are slowing.

EUR/USD posted a new 2014 low yesterday as spot broke briefly below 1.27. The trend has been very strong lately but is supported by the relative re-pricing in money markets. Since March the 2Y Europe-US swap spread has gone from flat to -60bp, underlining the marked difference in how investors see monetary policy next year across the Atlantic. In Reading the Markets Sweden our Swedish strategists ask the question of what this divergence could mean for Swedish rates.