Market movers ahead
- In the euro area, we estimate GDP was been flat in Q3, underscoring considerable loss of momentum. We expect Italy to slide into recession and Germany appears to have only just avoided one. On the other hand, Spain has started to shine.
- In the US, we estimate retail sales rebounded only modestly in October on the back of a weak September. Lower gasoline prices continue to weigh on headline growth but consumer spending also appears to have slowed a bit.
- In China, we expect data for October to show continued moderate downward pressure on growth in the wake of slower growth in credit and investment demand. A more severe slowdown is possible if China’s export growth also slows.
- In Demark, we expect inflation to have declined markedly in October to just 0.3% y/y from 0.5% y/y in September. We expect inflation to decline further in coming months, bringing Demark close to deflation.
- In Norway, we estimate inflation remained unchanged at 2.4% y/y in October. This is slightly below the central bank’s latest forecast and might ease some of the pressure for imminent easing.
Global macro and market themes
- The ECB was more dovish than expected, now setting an official target for the balance sheet at the level of early 2012.
- Risk markets are muddling through on central banks, cheap oil and US optimism.
- Divergence is here to stay in FX and bond markets.
- A US soft patch is unfolding mostly in hard data – ISM is still strong.
- The euro area and emerging markets are weak
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