Global financial markets digested the verdict from the ECB meeting on Thursday

Danske Research Team Danske Bank A/S

Market movers today

Today, we have a very thin calendar with no major economic data releases.
In Scandinavia, focus turns to CPI data in Denmark. See more on the next page.

Selected market news

On Friday, global financial markets digested the verdict from the ECB meeting on Thursday. On the data front in the US, we got the preliminary consumer confidence index for December from the University of Michigan, which rose to 98.0 from 93.8. This is the highest level since January 2015 and the very high consumer confidence supports our view that private consumption will continue to be a main growth driver in the US.

In the US, this week’s main event is the FOMC meeting on Wednesday. Stronger growth in H2 supports our view that the Fed will raise the target range by 25 basis points to 0.50-0.75% (in line with consensus and market pricing). All eyes will be on indicators for next year’s hiking path.

Non OPEC oil producers this weekend agreed to cut output by 558kb/d with Russia delivering 300kb/d. This was about as expected. It is still uncertain what the reference point for Russia's cut will be and most of the remaining cut will come in the form of a natural decline. Hence, the market impact should be limited by the weak details. Saudi Arabia pledged to cut further than the 458kb/d agreed to on 30 November. Overnight, Brent oil has climbed further to around USD56.6/bbl at the time of writing.

In Italian politics, over the weekend, the president has given the current foreign minister Paolo Gentiloni the mandate to form a new government (set to be broadly unchanged), see FT.

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Danske Research Team

Danske Bank A/S

Research is part of Danske Bank Markets and operate as Danske Bank's research department. The department monitors financial markets and economic trends of relevance to Danske Bank Markets and its clients.

GBP/USD hits multi-week tops around 1.3560

GBP/USD gathers fresh steam and advances to new three-month peaks near the 1.3560 zone on Friday. Cable’s sharp move higher comes after three daily drops in a row and follows the increasing selling pressure hurting the Greenback.

EUR/USD pops to fresh two-month highs, targets 1.1600

EUR/USD advances markedly, revisiting the upper 1.1500s for the first time since mid-June. The pair’s sharp uptick comes on the back of a strong retracement in the US Dollar amid BoJ intervention chatter and despite steady uncertainty in the Middle East.

Gold picks up pace, approaches $4,400

Gold rebounds toward the $4,400 mark per troy ounce on Friday, reversing the previous day’s pullback. The precious metal’s recovery comes as fresh and intense weakness keep weighing on the US Dollar, while traders keep assessing easing expectations of an imminent Fed interest rate hike and the situation from the Middle East.

Pi Network Price Forecast: PI extends consolidation as bulls eye $0.10

Pi Network (PI) price holds steady on Friday, maintaining a consolidating tone for three consecutive days. Mild retail strength in the PI token remains stable, with Open Interest above $9 million, while social buzz eases. PI token’s technical outlook is mixed, as bearish momentum wanes to neutral, with bulls eyeing the $0.1000 psychological level.

Weekly focus: Some relief in US inflation concerns

Actual inflation data for July came out as expected with a 0.1% m/m increase in headline CPI and 0.2% excluding food and energy. Annual headline inflation remains too high at 3.4% and means that wage earners are experiencing stagnating spending power at best, and core inflation is a bit higher than the inflation target of two percent would suggest.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.