Moving out of deflation

Market movers ahead

US retail sales have been weak of lat, but we expect to see a pickup in February despite the severe winter weather.
Industrial production numbers are likely to confirm the improving trend in Europe.
Key figures for both January and February are set to arrive simultaneously in China but there is little prospect of any significant change to the economic outlook.
Denmark's brief brush with deflation probably ended in February, though the plight of the Danish krone (DKK) is more in focus.
In contrast, we expect inflation figures (both actual and expected) to attract considerable attention in Sweden.

Global macro and market themes

Price falls in Europe have slowed and inflation may make a return this summer. Deflation appears to have significantly boosted German consumption in particular.
The US Fed wants to be less predictable.
China is cutting its growth targets.
Production delivers an upside surprise in Sweden but disappoints in Norway.
Danish house prices fell in December and the economy was far from overheating prior to this year's interest rate cuts.

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