Sweden: Strong start to 2018 amid increasing US-China tensions
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Market movers ahead
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Overall, it looks like a fairly quiet week on the news front. In the US, industrial production and more Fed speeches should not give a big change to the outlook.
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China GDP for Q4 is set to show growth of 6.7% y/y. This would leave overall growth for 2017 at 6.8% or 6.9%.
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In the euro area, we are set to get more details on December inflation with the final release. We estimate UK inflation fell back below 3% in December.
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In Scandinavia, we expect the most interesting data to be Swedish house prices (HOX), where we look for a further decline in Stockholm flats of 2.6% m/m, taking the cumulated decline to 12% since August 2017.
Global macro and market themes
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We are still positive on equities, as global growth remains solid, although the acceleration phase is likely to be over soon.
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Inflation remains one of the most important topics this year. Despite higher oil prices, we expect core inflation to remain subdued.
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In our view, markets have priced the ECB too aggressively, as we see the first ECB hike in Q2 19.
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Increasing tension between the US and China is a cause for concern.
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