Allan von Mehren
Danske Bank A/S
Market Movers ahead
Scandi Markets will be on its toes ahead of the Riksbank meeting on Thursday. We expect a 25bp cut and a lowering of its interest rate path.
The ECB meeting, also on Thursday, should be less eventful as the ECB will now evaluate the effect of the large plate of easing measures presented in June.
The ISM manufacturing index and the job market report on the calendar for next week will underpin the recent strengthening of the US economic recovery.
We also look for good news from China: we expect the NBS manufacturing PMI index to support our view that the Chinese economy is gradually recovering.
Global macro and market themes
Central banks are creating inflation, but not in consumer prices. The risk of new asset bubbles should be taken seriously.
Bond yields declined during H1 contrary to our and consensus expectations. Will we see another bond yield conundrum?
US housing and capex are picking up. So is core inflation.
China gained more speed in June while the euro recovery slowed a bit.
Focus
This week we published Nordic Outlook - June 2014. The outlook for the Nordics has brightened as the Danish economy has now entered a phase of recovery.
The insurgence in Iraq has hampered the global oil market over the past couple of weeks. We have looked at the short- and long-term impact on the oil market (see Research Commodities - Insurgence puts great Iraqi potential at risk, 26 June 2014).
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