Market Movers ahead
- Fed chairman Ben Bernanke will deliver the semi-annual monetary policy report (Humphrey-Hawkins) providing further thoughts on the economy and Fed exit.
- The German ifo will provide more information on the strength of the German recovery where recent weak production data has spread concern.
- Developments in Greece will continue to be on the market’s radar screen as well.
- The Danish government is expected to put forward the convergence programme on the public finances.
- First set of hard data in Sweden for January should make a new step upwards. In Norway unemployment data will be scrutinised after the Q4 GDP disappointment.
Global Update
- Risk appetite returned slightly in the past week as the Greek debt issue is losing attention. Equity markets recovered a bit while US bond yields pushed higher.
- The Fed took the first step in its exit plan by raising the discount rate. Strong US industrial data shows the short-term strength of the recovery is intact
- Asia’s strong finish to 2009 was witnessed by better-than-expected Japanese GDP data for Q4.
Focus
- In the first focus article we look closely at the outlook for the Swedish Riksbank. We see a 50-50 chance of a first hike in July followed by a further hike in October.
- In the second article we elaborate on the outlook for ECB policy. Debt uncertainties and weaker data means it will be longer before the ECB dares to lift its foot off the gas pedal.
