Danske Research Team
Danske Bank A/S
Market movers ahead
The main release next week is the US labour market report for July, which is one of the important data releases ahead of the Fed meeting in September.
We expect non-farm payrolls to increase by 210,000, which is a pace that will move the core of the FOMC in favour of a rate hike in September, in our view.
In the euro area, retail sales for June are set to decline in line with the lower consumer confidence.
German factory orders and industrial production should continue to be supported by foreign orders.
In the UK, the policy announcement, minutes and latest Inflation Report will be released at the same time. We expect the MPC to be divided on whether to raise the interest rate or not. The new projections will also attract attention.
In Denmark, it will be interesting to see if the Danish central bank continued to intervene in July in order to prevent the DKK weakening.
Global macro and market themes
The FOMC statement suggests the Fed is not far from the first rate hike.
US data is key to our call for a September Fed hike and very important for financial markets.
We expect higher short-end bond yields and lower a EUR/USD in the short term.
In the euro area focus is back on better fundamentals following the Greek deal in mid-July.
In China we expect the impact on growth from the stock market turmoil to be modest.
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
AUD/USD rises on risk-on mood, upbeat PMIs
The Aussie Dollar began the week on the front foot and registered gains against the US Dollar on Monday, gaining more than 0.54% as risk appetite improved. As the Asian session begins, the AUD/USD trades around 0.6449, up 0.01%.
USD/JPY: Japanese Yen bounces off multi-decade low against USD, lacks follow-through
The Japanese Yen draws some support from the possibility of a government intervention. The divergent BoJ-Fed expectations and easing Middle East tensions cap the safe-haven JPY. Traders also seem reluctant ahead of the key US macro data and BoJ meeting later this week.
Gold dips amid reduced geopolitical tensions
Gold prices plummet sharply and retrace last week's gains, down more than 2.50% as the Middle East's woes abate. The pullback in the price of gold metal could be attributed to profit-taking, as mentioned by Jim Wyckoff of Kitco News, alongside some modest strength in the US Dollar.
Ethereum could see a brief rally, Justin Sun suspected of buying heavily
Ethereum's recent price movement hints at a potential rally despite ETH ETPs recording outflows. The recent price improvement follows the fourth Bitcoin halving and a suspected Justin Sun wallet purchasing large numbers of ETH.
After Monday's relief rally, attention shifts to earnings and policy fronts
With the easing of tensions in the Middle East, safe-haven demand reversed course; global stock markets experienced a modicum of relief. Indeed, in a classic relief rally fashion, Monday saw a rebound in the S&P 500, snapping a six-day losing streak.