Share:

Market movers today

Today we get the HICP inflation numbers for the euro area. After yesterday's lower-than-expected Spanish and German prints, consensus expects the euro area figure at 2.5% y/y.

At 14:30 FED's preferred inflation gauge is released. Consensus expects the PCE core to slow down to 0.2% m/m SA, mirroring a similar decline in the CPI measure released earlier.

OPEC+ convenes on Thursday after their last scheduled meeting was postponed.

The 60 second overview

Heavy data releases from the euro area showed declining inflation, below consensus estimates, and mixed consumer confidence. European rates markets reacted strongly to the inflation release sending yields lower from the front end as additional rate cuts were priced. 10y German yields declined to multi-month lows of 2.42%. The German and Spanish inflation print came in below expectations at -0.4% m/m in November (cons.: -0.1%, prior: 0.0%), and -0.4% m/m (cons.: 0.1%, prior: 0.3%), respectively. This combined with slowing inflation in Belgium and Ireland means that today's euro area flash inflation print is pointing to a 2.5% release. The EU Commission confidence indicator was mixed across sectors with improved confidence in the service sector and lower confidence in the industry. Yet, over the past months, confidence in the industry has stabilized from the large downward trend during the previous years in a signal of activity bottoming out like we have seen in the PMIs.

In the US, we had positive economic data, including an upwardly revised Q3 GDP growth of 5.2% annualised rate, which has strengthened the broad USD, yet the Beige Book has signalled a pre-November 18 economic slowdown.

Overnight, the Chinese PMI pointing to a slowdown in the manufacturing sector with a 49.4 print, while services pointed to a largely stagnating sector of 50.2, both indicators below consensus.

Yesterday, we published a piece on the EU fiscal rules and what to expect from the negotiations on a new set of rules. Currently there is no agreement on the new fiscal rules and the clock is ticking, as the old rules will otherwise come into force again from 1 January 2024. We expect that the EU Member States will most likely not sign a final legal set of rules before year-end, however, we expect that they will agree on a "landing zone" for the new rules at the ECOFIN meeting on 8 December. We expect that the "landing zone" will reinstate the old 3% deficit and 60% debt targets, but with greater flexibility to adapt country specific fiscal adjustment paths. The fiscal stance in the euro area becomes tighter in the coming years as sustainable public finances get renewed focus. See more in Euro Area Research: New fiscal rules in the EU - aligning theory and practice?, 29 November 2023.

Equities: Equities were mixed on Wednesday, with US a tad lower and Europe half a percent higher. The European outperformance partly underscored by benign inflation numbers, but also catchup from the prior session. Interesting that the fall in yields have not chalked up a new wave of equity risk taking. AAII bull/bear spread is back at July highs, so positioning is probably a piece to the puzzle. Cyclicals beat defensives though, with an odd mix of both banks and real estate among best sectors. US futures and Asian markets are a little higher this morning.

FI: The inflation releases from Spain and Germany sent yields lower through yesterday's trading session with 10y Bunds ending the day 6bp at multi-month lows of 2.42%. Intra-euro area spreads saw little change. Curves steepened from the front end as the markets added to rate cut expectations with adding another 10bp yesterday to the 2024 pricing. Compared to Monday' close, markets have added 22bp in total with a total of 111bp of cuts priced in through 2024.

FX: EUR/USD sustained consolidation slightly below the 1.10 mark amid a prevailing strengthening of the USD. USD/JPY has exhibited a downward trajectory and currently hovers just above 147. Meanwhile, EUR/GBP experienced a further decline, settling within the mid-0.86 range. EUR/SEK dipped below 11.40, and EUR/NOK is positioned around 11.70.

Credit: Yesterday, credit markets were again positive with iTraxx Main 1.5bp tighter to 66.8bp while Xover tightened by 10.2bp to 367.1bp. In addition, the primary markets continue to be wide open with several financial and corporate issuers active with deals across the Nordic area and five Eurobond transactions. The current market sentiment is showing constructive credit conditions most types of credit transactions, however some seasonal slowdown should soon be expected to influence the current high activity.

Nordic macro

Riksbank Governor Bunge speaks about monetary policy and the latest decision. Recall the silent period has not yet passed, hence, she cannot say speak for herself, just on behalf of the Board's common decision.

Share: Feed news

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.

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended Content


Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended Content

Editors’ Picks

EUR/USD holds steady above 1.0800, as German/ US inflation data loom

EUR/USD holds steady above 1.0800, as German/ US inflation data loom

EUR/USD is trading sideways above 1.0800 in the European morning on Thursday. The pair stays underpinned by the renewed US Dollar weakness. But further upside remains elusive ahead of the key inflation data from Germany and the US. 

EUR/USD News

USD/JPY remains heavy below 150.00 on BoJ Takata's hawkish signals

USD/JPY remains heavy below 150.00 on BoJ Takata's hawkish signals

USD/JPY is consolidating steep losses below 150.00, having tumbled on hawkish comments from BoJ policymaker Takata. Takata hinted at a likely policy pivot, sending the Japanese Yen higher across the board. US PCE inflation data is next on tap. 

USD/JPY News

Gold could regain $2,050 on soft US Core PCE inflation data

Gold could regain $2,050 on soft US Core PCE inflation data

Gold price is trading in the green zone for the second straight day early Thursday, stretching toward the two-week high of $2,041. A broad USD selling amid an improvement in risk sentiment is underpinning the Gold price ahead of the all-important PCE data due later in the day.

Gold News

Bitcoin ETF success could see Ethereum alternative soon, says Jim Cramer

Bitcoin ETF success could see Ethereum alternative soon, says Jim Cramer

Following the landmark approval of multiple spot Bitcoin exchange-traded funds (ETFs) on January 10, this has been the abounding theme in the cryptocurrency market. 

Read more

The Fed's favoured measure of inflation on tap “the PCE deflator“

The Fed's favoured measure of inflation on tap “the PCE deflator“

Unless you were out caving, like Lando Norris was and missed out on when the Lewis Hamilton to Ferrari news broke, you likely heard that Equities hit fresh record highs last week in several markets from Europe to Japan.

Read more

Majors

Cryptocurrencies

Signatures