More weakness ahead before relief
|Market movers ahead
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In the US, the government shutdown keeps data releases at a minimum. Next week, the Markit PMIs are the most important releases.
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We expect no new policy signals at the ECB meeting on Thursday. Here the debated growth risk assessment will take centre stage. On the same day, we expect another weak PMI print for the euro area.
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In the UK, we start the week with Theresa May putting forward a motion of her Brexit plan B before the House of Commons. It is uncertain whether Monday is a game changer or not. Probably it will not be.
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We expect the Bank of Japan to keep policies unchanged at its meeting ending on Wednesday.
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We see little reason for Norges Bank to depart from its planned gradual normalisation of monetary policy. We expect no changes to interest rates at the policy meeting on Thursday.
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In Sweden and Denmark, we plan to look out for new labour market data.
Weekly wrap-up
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Economic data confirmed a global slowdown in Q4. We expect the global slowdown to continue in Q1 but believe that China – the epicentre of the global slowdown – will drive a moderate recovery from Q2
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The risk of a no-deal Brexit has increased but so has the chance the UK could remain if the process ends up with a second referendum.
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More dovish central bank talks are in the pipeline for Q1.
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