Allan von Mehren
Danske Bank A/S
Market movers ahead
- In the US, the most important data release next week is the jobs report for August on Friday. We estimate non-farm payrolls increased 175,000 in August in line with consensus. Our estimate is below the prints of the last two months, but still above the amount needed for slack to come down (estimated in the range of 75-150k).
- In the euro area, y/y inflation has ticked up every month since April and we expect this to continue in August as base effects will keep upward pressure on inflation.
- In China, we see a clear risk of a correction lower in the Caixin PMI manufacturing index which rose strongly in July. We estimate the index will fall to 49.8 (consensus 50.2) and thereby close the gap to the official PMI which was much more subdued in July.
- In Scandinavia we have a heavy data calendar next week. In Sweden KI will show their latest forecast for the Swedish economy, which could have quite strong repercussions on all Swedish fixed income markets, and maybe even on the Riksbank’s future QE purchases. In Norway, we expect that Mainland GDP expanded 0.3% q/q in Q2.
Global macro and market themes
- US economy on a firmer footing as financial conditions are more supportive and drag from low oil price is fading.
- The Fed is eying the next hike – job growth and global risks are key for the timing.
- Euro area resilient to Brexit – we have revised GDP growth higher.
- Stocks supported by low yields and fewer risks. Bond yields low for long, EUR/USD range bound.
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