Jens Nærvig Pedersen
Danske Bank A/S
Market Movers
Federal Reserve chairwoman Janet Yellen will speak in New York tonight. After her Texas Fed’s Kaplan is set to speak.
The US Conference Board’s consumer confidence index for March is released today. The index has been range-bound over the past year but is currently at the lower end of the range. We expect a rebound to 94, suggesting that consumers are still quite upbeat.
M3 money supply and bank lending for February due today will give the first data point in determining the price on the ECB’s new TLTRO II loan. The lending figures are relevant as the interest rate on the new TLTRO II loan is dependent on lending growth in the period from February 2016 to January 2018. If a bank exceeds its benchmark in the TLTRO II loan it will be charged a negative rate down to the deposit rate over the entire period of the loan. Note the seventh auction on the TLTRO I is scheduled for 30 March and could be a bit more interesting than the previous ones as the amount borrowed can be rolled over into the new TLTRO II.
In Sweden, we receive trade balance data and retail sales data, see Scandi Markets.
Selected Market News
US core PCE was 1.7% y/y in February, unchanged from 1.7% y/y and below our and the consensus expectation of 1.8% y/y. Although, on an unrounded basis, it was the highest core PCE inflation reading since January 2013, it marked the 46th consecutive month that inflation has undershot the Federal Reserve’s 2% inflation target. Yesterday, Atlanta Fed cut its forecast for Q1 US GDP growth to 0.6% y/y from 1.4% y/y, which hints that the US economy might be looking at another quarter of weak growth.
The all important March job report is due on Friday and financial markets will look to see whether it will once again be strong enough to overshadow downbeat signals from other economic key figures and whether it will be strong enough to justify recent comments from Federal Reserve officials, which have been on the hawkish side talking up the probability of a next rate hike in the coming months.
Yesterday, oil and energy ministers from Oman and Indonesia pledged to attend the 17 April meeting in Doha. All OPEC members except Iran and Libya thus look set to join the meeting, where the production freeze accord from January will be on top of the agenda. The news does not look to have left a mark on the oil price – the price on Brent crude has inched below USD40/bl.
This publication has been prepared by Danske Bank for information purposes only. It is not an offer or solicitation of any offer to purchase or sell any financial instrument. Whilst reasonable care has been taken to ensure that its contents are not untrue or misleading, no representation is made as to its accuracy or completeness and no liability is accepted for any loss arising from reliance on it. Danske Bank, its affiliates or staff, may perform services for, solicit business from, hold long or short positions in, or otherwise be interested in the investments (including derivatives), of any issuer mentioned herein. Danske Bank's research analysts are not permitted to invest in securities under coverage in their research sector.
This publication is not intended for private customers in the UK or any person in the US. Danske Bank A/S is regulated by the FSA for the conduct of designated investment business in the UK and is a member of the London Stock Exchange.
Copyright () Danske Bank A/S. All rights reserved. This publication is protected by copyright and may not be reproduced in whole or in part without permission.
Recommended Content
Editors’ Picks
EUR/USD stays below 1.0700 as focus shifts to Fed policy decisions
EUR/USD stays in its daily range below 1.0700 after the data from the US showed that private sector employment rose more than expected in April. The Federal Reserve will announce monetary policy decisions later in the day.
GBP/USD holds steady below 1.2500 ahead of Fed
GBP/USD is off the lows but stays flatlined below 1.2500 on Wednesday. The US Dollar holds its ground after upbeat ADP Employment Change data and doesn't allow the pair to stage a rebound ahead of the Fed's policy decisions.
Gold consolidates losses below $2,300, eyes on Fed policy decision
Gold price hovers below $2,300 as uncertainty ahead of the Fed’s policy announcements improves the appeal of the US Dollar and bond yields. The Fed is expected to hold the policy rate unchanged amid stubborn inflation.
A new stage of Bitcoin's decline
Bitcoin's closing price on Tuesday became the lowest since late February, confirming the downward trend and falling under March and April support and the psychologically important round level.
US Federal Reserve Decision Preview: Markets look for clues about interest rate cut timing
The Federal Reserve is widely anticipated to keep interest rates unchanged. Fed Chairman Powell’s remarks could provide important clues about the timing of the policy pivot.