Global Update
- The Asian recovery is proving very strong with Japan now joining the party. South Korean exports and production are rising steeply.
- US GDP was mixed, but forward looking indicators continue to rise. Risks to global growth are increasingly on the upside in coming quarters, which could lead to a positive feed back loop. We look for further rises in bond yields and equity prices.
- Credit tightening is slowing in Euroland and the steep decline in housing demand is levelling off. In UK, PMI data point to turnaround in exports, retail sales are improving and house prices are stabilising.
- Unemployment is rising sharply in Denmark and we have revised our estimate for unemployment higher.
Market movers ahead
- Another weak US payrolls report is expected. Results of the stress tests in the US will also take centre stage.
- In Euroland the ECB meeting on Thursday will be in focus. We look for a rate cut of 25bp and implementation of non-standard measures. The Bank of England is expected to keep rates unchanged.
- Data for the Danish currency reserve should show a further increase. We look for a 10bp narrowing of the rate spread to Euroland on Thursday.
- Norges Bank is expected to disappoint and only deliver a 25bp cut.
- Minutes from the Swedish Riksbank and the speech by governor Ingves should give more info on thoughts about quantitative easing. PMI data are expected to rise.
