Danske Research Team
Danske Bank A/S
Market Movers
The main event today is the release of the FOMC minutes from the October meeting. Here we will get more details on why the Fed flagged a clear tightening bias. The FOMC revealed that it will determine ‘whether it will be appropriate to RAISE the target range at its NEXT meeting’ (our emphasis). We think that with the strong job report FOMC will consider a hike ‘appropriate’ (see also First Fed hike in December due to very strong job report, 10 November) but it will be interesting to see what conditions made the FOMC flag a tightening bias before the strong job report. Look for possible details on how the FOMC will proceed next year.
Denmark is set to auction the new 2Y (Nov-18) and the 10Y (Nov-25) benchmarks.
Not many data releases scheduled for today. Numbers for US housing starts and building permits in October are due today. We expect them to support our overall view that the housing market is improving.
The Fed and the ECB continue to be in the spotlight. Several ECB and FOMC members are speaking today and the market will listen to what they may have to say about the upcoming meetings in December.
Selected Market News
Focus continues to be on terror attack threats from IS. Yesterday a football match in Hannover between Germany and the Netherlands was cancelled due to a tip that a bomb attack was planned inside the stadium. During the night, two Air France flights from the US to Paris were diverted due to bomb threats. According to Bloomberg, there has been shooting during an anti-terrorist operation 9 kilometres from Paris. The anti-terrorist operation is still under way at the time of writing.
The Chinese housing market recovery slowed in October according to new housing data released overnight. New-home prices rose in 27 cities in October against 39 in September. Prices dropped in 33 cities. Also the pace of home sales slowed. The housing market recovery is still weak especially in the smaller cities despite many different easing measures this year. This suggests that housing investments will continue to be weak.
US CPI inflation data releases yesterday showed that headline CPI inflation increased from 0.0% y/y to 0.2% y/y, while core CPI inflation was unchanged at 1.9% y/y in October. The FOMC is targeting PCE core inflation but the pickup in CPI services excluding rents should provide some relief for the doves.
Risk sentiment is generally positive. Stock markets in Japan and China are slightly up this morning (at the time of writing), while US equity indices closed almost unchanged. Europe’s stocks advanced the most in six weeks yesterday.
This publication has been prepared by Danske Bank for information purposes only. It is not an offer or solicitation of any offer to purchase or sell any financial instrument. Whilst reasonable care has been taken to ensure that its contents are not untrue or misleading, no representation is made as to its accuracy or completeness and no liability is accepted for any loss arising from reliance on it. Danske Bank, its affiliates or staff, may perform services for, solicit business from, hold long or short positions in, or otherwise be interested in the investments (including derivatives), of any issuer mentioned herein. Danske Bank's research analysts are not permitted to invest in securities under coverage in their research sector.
This publication is not intended for private customers in the UK or any person in the US. Danske Bank A/S is regulated by the FSA for the conduct of designated investment business in the UK and is a member of the London Stock Exchange.
Copyright () Danske Bank A/S. All rights reserved. This publication is protected by copyright and may not be reproduced in whole or in part without permission.
Recommended Content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.