Kasper Kirkegaard
Danske Bank A/S
Market movers today
There is little economic data published today.
German retail sales are due for release. They are expected to have softened in November following strong growth in October.
Greece’s parliament will cast a ballot in Athens with Prime Minister Antonis Samaras needing 180 votes to appoint his nominee, Stavros Dimas. Failure to elect Dimas is expected to lead to a general election in late January or early February.
Selected market news
Risk sentiment has remained positive during the holidays - equity markets are mostly higher in Asia this morning.
US equity indices are back at record highs after having rebounded strongly from the pre-Christmas correction. The S&P500 index is up 5% in just seven trading days.
European stocks have also rebounded but have not fully recovered their December losses with the EuroStoxx 50 index still trading 3% below its recent high.
The oil price has not yet recovered but Brent oil has traded stable around USD60 per barrel since 16 December, which has helped to reduce volatility across markets. This is not least visible in the Norwegian krone with EUR/NOK trading stable just above 9.00 during the holidays.
While the US bond market has seen selling pressure - with the 2Y Treasury yield trading above 0.7% and the 10Y Treasury yield rebounding back above 2.2% - the German bond market has traded stable with the 10Y yield around 0.6%.
Euro money market rates have come lower and the 2Y German government bond yield has fallen below -9bp. This divergence in the front end of the US and European markets has brought renewed pressure on EUR/USD, which is trading below 1.22.
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