Market Movers ahead
In Spain the government’s reform proposal and 2012 budget on Friday could pave the way for a request for a precautionary credit line. In addition, a new estimate for Spanish banks’ recapitalisation needs is expected next week.
In the European data calendar we expect the German IFO survey to show a moderate improvement in August.
We expect US housing data to confirm a recovery in the housing market and US durable goods orders to suggest softness in manufacturing investments.
In Japan the leadership election in LDP, the main opposition party, has the potential to fuel the current island row with China.
In Scandinavia we expect data to show a resilient Norwegian economy and a Swedish economy suffering in the wake of a global manufacturing slowdown.
Markets are having second thoughts about the effectiveness of the recent aggressive policy moves by central banks across the world as data continue to disappoint and Spain still considers its options.
Weak manufacturing PMIs in the euro area stayed subdued in August, suggesting the euro area remains in recession in Q4.
The US housing market continues to be a ray of light.
Bank of Japan expands its QE programme in a pre-emptive move to stem the appreciation of JPY in the wake of Fed’s recent aggressive easing move.
In China the HSBC manufacturing PMI remained weak in August but there were tentative signs of stabilisation.
The Swedish government announced larger-than-expected stimulus in the 2013 budget and we have revised our GDP forecast higher.