Sverre Holbek, CFA
Danske Bank A/S
Market Movers
The second estimate of UK Q3 GDP is released at 10:30 CET. Data have been more or less in line with the assumptions behind the calculations of the first estimate. Thus, we expect the second estimate to show growth of 0.5% q/q as in the first release. Unlike the first release, we will get details on the expenditure subcomponents, which we expect to show that growth was mainly driven by domestic demand, especially private consumption.
Euro economic confidence data for November are released at 11:00 CET.
In Scandinavia, Swedish and Norwegian retail sales will be in focus this morning (released at 9:30 CET and 10:00 CET, respectively). Also coming up are Norwegian unemployment figures (10:00 CET). See Scandi Markets.
Selected Market News
Lacklustre economic data weigh on Asia bourses this morning. A range of economic Japanese and Chinese data was released overnight. While the headline CPI was a tad firmer than expected (0.3% y/y in October, survey: 0.2%, prior: 0.0%), the yearly change in the core figure unexpectedly fell to 0.7% (survey: 0.8%, prior: 0.9%). Furthermore, there was weakness in household spending, declining 2.4% y/y (survey: 0.0%, prior: - 0.4%). Furthermore, in China, industrial profits fell 4.6% y/y in October. Profits earned by Chinese industrial companies have declined for five consecutive months, reflecting overcapacity in the sector as the economy rebalances from investment- to consumptiondriven growth. At the time of writing, the Nikkei index is trading 0.3% lower, while the Shanghai Composite Index is down by 1.5%.
Subdued trading session due to US holiday. As the US was closed for the Thanksgiving holiday, European stocks continued to be driven by expectations for additional monetary stimulus to be announced at the December meeting, causing the Eurostoxx index to post a 1% gain. In fixed income, Portuguese government bonds extended their rally following the appointment of socialist leader Antonio Costa as Prime Minister on Tuesday. The likely end to political uncertainty, which has dominated the market since the inconclusive election in May, helped taking the 10yr yield some 9bp lower yesterday.
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