Brent crude oil dipped below the USD60/bbl mark

Market movers today

• At the meeting tonight, we expect the FOMC to remove considerable time from the statement, which should put upward pressure on short US rates and support the USD. The FOMC is likely to revise down its unemployment and inflation projections for next year but more interesting will be changes in the dots reflecting individual members’ projections of the Fed funds rate.

• In Greece the first vote out of three in the presidential elections is scheduled for today. In the first two rounds 200 out of 300 votes are needed, whereas ‘only’ 180 are required in the third (29 December). We do not expect a president to be elected today, which could have a negative market impact even though there are two more rounds.

• In the US we expect headline CPI and core inflation to decline with the largest decline in headline inflation, as it is driven down by the drop in gasoline prices. Final euro HICP inflation is also due for release and there is a small risk that it will be revised down to a new cycle-low of 0.2% y/y.

• In the UK the ILO unemployment rate should decline, while average earnings are expected to increase. Bank of England will also publish minutes from the MPC meeting.

• In Denmark, Q3 property prices are scheduled for release.

Selected market news

The price on Brent crude oil dipped below the USD60/bbl mark yesterday as the price war between OPEC and non-OPEC producers continues to be the dominant market theme. Russian Energy Minister Alexandr Novak said yesterday that Russia does not plan to cut production next year, amid weak demand and tumbling prices. The Kuwait oil minister furthermore dismissed an OPEC emergency meeting before the June regular session. The continued slide in the oil price triggered significant intra-day movements in both the NOK and the RUB yesterday.

Yesterday, the Danish Debt Management Office (DMO) released its strategy for 2015. Next year the target for issuance of domestic bonds is DKK75bn and the target for the outstanding volume of treasury bills end-2015 is DKK30bn. The focus will be on a new DGB ’18 during H1 15, a new 5Y DGB ’20 on 4 February and the existing DGB ’25 – see Denmark to issue DKK75bn in bonds next year.

Japanese exports rose 4.9% y/y and imports dropped 1.7% y/y in November, disappointing both our own and the consensus expectations. In particular, the drop in imports highlights the present weak state of domestic demand in Japan.