Jens Nærvig Pedersen
Danske Bank A/S
Market Movers
Fed’s Lockhart and Kaplan (both non-voters) are scheduled to speak today and the US labour market condition index is due for release.
Confusion regarding China’s FX policy contributed to the market turmoil last week. Focus today and throughout the week will therefore be on China and any announcements on monetary or economic policy.
Scandi markets will keep an eye on December’s CPI inflation figures in Denmark and Norway published today.
Selected Market News
Worries over the outlook for global economic growth continue to weigh on sentiment, which has sent equity markets and commodity markets plunging at the start of this week, thereby continuing the trend from last week. Stock prices in China and Hong Kong have declined 2-3% today, the price on Brent crude has dropped below USD32/bl and the price on 3M LME Copper has dropped below USD4,500/MT again. Both the CNY and the CNH have strengthened a bit today.
China’s December CPI inflation was 1.6% y/y and December’s PPI inflation was 5.9% y/y, in line with the consensus expectation, highlighting that inflation in China remains subdued.
UK Prime Minister David Cameron said on Sunday that he is confident a deal on the terms of UK EU membership can be reached next month, which means a referendum on the matter could come already this summer.
Saudi Arabia announced on Friday that it is looking into the possibility of selling shares in the state-owned oil company Saudi Aramco. It highlights (1) that Saudi Arabia needs money to finance the large budget deficit amid low oil prices and (2) that the new leadership in Saudi Arabia continues to push forward with its reform agenda.
2015 ended very well for the US labour market as 292,000 new jobs were created. The revisions to the previous months were also favourable as the two-month net revisions were +50,000. Overall, the US labour market rebounded in Q4 with on average 284,000 new jobs added after the slowdown in Q3 when 174,000 new jobs were created per month on average. In total, employment rose by 2.65m which, however, was lower than in 2014 when employment increased by 3.12m. Despite the weak activity data lately, the strong labour market tells us that the underlying growth in the US is solid.
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 consolidates weekly gains above 1.1150
EUR/USD moves up and down in a narrow channel slightly above 1.1150 on Friday. In the absence of high-tier macroeconomic data releases, comments from central bank officials and the risk mood could drive the pair's action heading into the weekend.
GBP/USD stabilizes near 1.3300, looks to post strong weekly gains
GBP/USD trades modestly higher on the day near 1.3300, supported by the upbeat UK Retail Sales data for August. The pair remains on track to end the week, which featured Fed and BoE policy decisions, with strong gains.
Gold hits new highs on expectations of global cuts to interest rates
Gold (XAU/USD) breaks to a new record high near $2,610 on Friday on heightened expectations that global central banks will follow the Federal Reserve (Fed) in easing policy and slashing interest rates.
Pepe price forecast: Eyes for 30% rally
Pepe’s price broke and closed above the descending trendline on Thursday, eyeing for a rally. On-chain data hints at a bullish move as PEPE’s dormant wallets are active, and the long-to-short ratio is above one.
Bank of Japan set to keep rates on hold after July’s hike shocked markets
The Bank of Japan is expected to keep its short-term interest rate target between 0.15% and 0.25% on Friday, following the conclusion of its two-day monetary policy review. The decision is set to be announced during the early Asian session.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.