Focus on US jobs report and ISM indices

Market movers ahead

In the US, we are due to get several important data releases, which will be key for the Fed’s decision whether or not to hike later this year. In particular, focus is on the jobs report and ISM indices for September.
The Presidential election campaign has intensified since the first TV debate this week and markets will follow the developments in polls closely.
In China, we get official PMI’s and FX reserves figures for September.
In Europe, we get ECB minutes, where focus will be on the signals from the discussion on how the ECB intends to cope with the self-imposed technical restrictions to its bond purchases. Also, euro area retail sales and German factory orders are due for release.
In the UK, focus remains on the economic impact of the UK’s EU vote. We get PMIs for September, production figures for August and the NIESR GDP estimate for Q3.
In Denmark, the FX reserves data for September are due. We have not seen a large Brexit-related inflow, so the FX reserve has been flat since June. Although EUR/DKK has moved higher, it is still under the central rate.

Global macro and market themes

OPEC supply cut is not a game changer.
Protectionism and geopolitics pose risks for global growth.
Core interest rates in Europe to stay depressed despite higher HICP inflation.
Europe’s banking woes are not a EUR negative and we expect EUR/USD to remain in a narrow 1.10-1.14 range.
We recommend a structurally underweight position in equities versus cash

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