Danske Research Team
Danske Bank A/S
Market movers ahead
Negotiations between Greece and three creditor countries progress slowly but deadline for avoiding default now appears to be extended until mid-June.
We expect no new signals on policy in connection with the ECB meeting. Focus will be on ECB’s plans to frontload bond purchases to avoid a seasonal squeeze.
In the euro area we expect inflation to have increased to 0.1% y/y in May but there are upside risks after Italy and Spain have reported higher-than-expected inflation.
In the US we expect non-farm payrolls to have increased 220,000 in May. In our view this is still strong enough to pave the way for a Fed-hike in September.
In Denmark the foreign reserve data for May will show to what degree the Danish central bank has continued its purchases of DKK in May.
Global macro and market themes
The Fed is close to ticking all the boxes for lift-off.
In the three months up to the first hike US bond yields tend to rise, the USD strengthens and stocks rise moderately.
We look for a repeat of this pattern.
Euro-area data confirm short-term softness but strong medium-term outlook.
US housing picks up steam.
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 edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.