Weekly Focus: Financial turmoil and central bank fatigue

Market Movers

Financial markets' turmoil continued to dominate price actions this week and investors are likely to look for policy responses to stabilise markets.
In the US , minutes from the FOMC January meeting are due for release on Wednesday, which might bring a bit more shades on the different views within the FOMC. In addition, several FOMC members are scheduled to speak in the coming week.
ECB President Draghi is set to speak to EU Parliament on Monday and his words will be scrutinised for any new comments on possible further easing. In addition, the minutes/accounts from the January ECB meeting are due for release on Thursday, which may provide indications of what instruments the ECB considers or prefers after the quite dovish January meeting.
In the UK , focus is on the EU council meeting on 18-19 February when the draft deal between the EU and the UK is to be discussed. If an agreement is reached at the meeting, the UK is likely to hold a EU in/out referendum in June. However, the negotiations are likely to be very difficult and it is not certain a deal will be made at this meeting.

Global Macro and Market Themes

The world is not yet facing a systemic crisis but risks are rising.
There is an element of central bank fatigue and global growth is set to be hit by the current turmoil.
We expect the ECB to launch a range of stimulus factors in March and the Fed to postpone rate hikes until September.
However, risky assets could remain under pressure until there is a coordinated global policy response.

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.