Market Movers

  • In the euro area, we get M3 money supply and bank lending figures. Growth in M3 has started to slow a bit in the past months, which might indicate that economic growth will slow in the latter part of H2 16. The bank lending figures could also attract some attention in light of the current focus on bank credit. We saw some weakness in lending growth in December but as the figure can be quite volatile, we suggest awaiting this number before drawing any conclusions.

  • In the UK, we do not expect any revisions to overall GDP growth in Q4 in the second release to be released today, i.e. we expect an unchanged print of 0.5% q/q. However, it is the first time the subcomponents from the expenditure side are published and we expect them to show that private consumption was still the main growth driver.

  • In the US, we will get January data on durable goods orders. The weakness in durable goods demand has been a major factor behind the downturn in the US manufacturing sector and a turn in demand would be very much welcomed.

  • St. Louis Fed President Bullard speaks today. Last week he made a very dovish impression, stating that he thinks it is unwise to proceed with the hiking cycle when inflation expectations continue to decline.


Selected Market News

Market movements have been scattered overnight. The US equity market reversed early losses and finished in the plus after the oil price stabilised. Most Asian stock markets are posting similar gains this morning, notably the Japanese Nikkei index, which is up 1.5% following reports that the government is considering an increase in spending to support economic growth. The JPY is weakening against the USD as a sign of better risk sentiment. However, the Chinese stock market fell sharply by 3%, the most in a month. With no major economic news out China today, investors appear to be concerned that recent gains may be overdone relative to an uncertain economic outlook. In the UK, a Bloomberg survey showed said that there is a 40% probability of an economic recession should a Brexit happen (for more coverage, The UK's EU Referendum – Brexit – what if?), 22 February 2016.

The uneven market developments seem to reflect uncertainty about the fundamental strength of the world economy. Last night, the IMF called for the G20 meeting in Shanghai this weekend to come up with ‘a strong policy response, both national and multilateral, including from the G20’ if downside risks materialise given concerns about slowing global economic growth due to the global impact of China’s transition to more balanced growth and signs of distress in emerging markets. IMF calls for both fiscal policies (where there is fiscal space) and balance sheet repair in the financial sector as well as preparedness of a coordinated G20 plan. However, US treasury secretary Lew sounded less alarmed yesterday about the global economic outlook, saying ‘this is a moment where you’ve got real economies doing better than markets think in some cases’ and that markets should not ‘expect a crisis response in a non-crisis environment’ ahead of the G20 meeting.

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


Recommended Content

Editors’ Picks

EUR/USD stays below 1.0800 after upbeat US data

EUR/USD stays below 1.0800 after upbeat US data

EUR/USD stays under bearish pressure and trades slightly below 1.0800 in the American session on Thursday. The data from the US showed that the real GDP growth for the fourth quarter got revised higher to 3.4% from 3.2%, supporting the USD and weighing on the pair.

EUR/USD News

GBP/USD stays in daily range above 1.2600

GBP/USD stays in daily range above 1.2600

GBP/USD fluctuates in a narrow channel above 1.2600 on Thursday. The better-than-expected Initial Jobless Claims data from the US and the upward revision to the Q4 GDP growth helps the USD stay resilient against its rivals and limits the pair's upside.

GBP/USD News

Gold clings to strong daily gains above $2,200

Gold clings to strong daily gains above $2,200

Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays above 4.2% after upbeat US data and makes it difficult for XAU/USD to preserve its bullish momentum.

Gold News

XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC

XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC

XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase. 

Read more

Portfolio rebalancing and reflation trades emerge into Q2

Portfolio rebalancing and reflation trades emerge into Q2

Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.

Read more

Majors

Cryptocurrencies

Signatures