Sweden: Scandi inflation back in the spotlight

ANALYSIS | 08/07/2015 13:29:05 GMT

Market movers ahead

In the US the focus next week will be on consumer spending. Private consumption should improve going forward and be the main driver of GDP growth.
US PPI and import prices will provide insight about underlying price pressure on goods after the oil price decline in July.
In the euro area the GDP growth figure for Q2 should confirm that the recovery continued, but relying on stronger German activity, not weaker French activity.
Euro-area survey indicators should give a first sign of improvement now that uncertainty has faded on the back of the Greek deal.
Although the focus in the UK has moved to inflation, wage growth, which is due for release next week, is still an important determinant for the Bank of England.
In Scandi markets attention will focus on inflation with the release of the Norwegian, Swedish and Danish figures.

Global macro and market themes

Gasoline prices have been resilient to the oil price drop, resulting in a modest impact on consumers.
The Fed’s Lockhart provided a hawkish shift in Fed rhetoric which supports our call for a September hike.
The Fed pricing is still too subdued, and we expect higher short-term US yields and lower EUR/USD.
The Bank of England is more dovish than expected due to strong sterling and the lower oil price.
The euro-area periphery countries are recovering, but political uncertainty is looming.

Share: Analysis feed

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.

Editors’ Picks

How will US Dollar react to Q1 GDP data? – LIVE

The US' GDP is forecast to grow at an annual rate of 2.5% in the first quarter of the year. The US Dollar struggles to find demand as investors stay on the sidelines, while waiting to assess the impact of the US economic performance on the Fed rate outlook.