The minutes from the 15-16 March FOMC meeting are due for release

Market Movers

• This afternoon, the minutes from the 15-16 March FOMC meeting are due for release. As Fed communication after the meeting has been extensive, we do not expect any significant news, especially not since Fed chair Yellen has already set the stage with her recent speech where she repeated the concerned message from the FOMC meeting. Yellen definitely put more weight on the downside than on the upside risks to the US economy.

• In Germany, we expect industrial production data for February to show that production declined 2.0% m/m in February following the extraordinarily large increase of 3.3% m/m in January.

• The Polish central bank is expected to keep the key policy rate unchanged at 1.5%.

• In Sweden, both Riksbank Governor Ingves and Deputy Governor Skingsley are scheduled to speak. Several data releases are due in Denmark. For more see Scandi Markets.

Selected Market News

Chinese Caixin services PMI increased to 52.2 in March from 51.2 in February indicating that also the services sector in China is in better shape. The composite index increased to 51.3 from 49.4 and is now again in expansionary territory as both services and manufacturing PMIs increased in March. Both PMIs suggest that the Chinese economy has stabilised. The employment sub-index for services was weak as it fell below 50 for the first time since August 2013, indicating lower employment. Hong Kong’s Nikkei PMI was quite weak as it declined to 45.5 in March from 46.5 in February, the lowest level in seven months. Output, new orders and employment sub-components all fell.

In the US, ISM non-manufacturing increased to 54.5 in March from 53.4 in February putting an end to four consecutive months of decline. It seems as if the nonmanufacturing index has lagged the development in the manufacturing index and if so we could see further improvement in the coming months. The rebound in both ISM manufacturing and non-manufacturing indices supports our view that while the US slowed by the end of 2015 and in the beginning of 2016, we should see the economy accelerate in Q2 and Q3.

Yesterday, US stocks fell for the second day in a row despite a jump at the end of the trading session. Asian stock markets in general are in green but not by much. The oil price has recovered slightly and Brent oil is again trading in its previous price range of USD38-42 per barrel. In the FX markets, downward pressure remained on EUR/DKK yesterday and the JPY continued to strengthen against the dollar. (for more on FX, see the FX section on the next page).

Yesterday, Iceland’s Prime Minister Sigmundur David Gunnlaugsson was forced to step aside because of his involvement in the Panama Papers scandal.

Today, the Netherlands is holding a (non-binding) referendum on the EU-Ukraine trade deal adding fuel to the increasing political uncertainty in the EU.

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