Danske Research Team
Danske Bank A/S
Market movers today
- Today, we have a very thin calendar with no major economic data releases.
Selected market news
Yesterday, data for Chinese property prices was released. Chinese house prices showed further signs of cooling in January. This follows several measures over the past six months to tighten the housing market (increase in downpayment required, tighter lending standards for developers, restrictions on number of houses Chinese citizens can buy). For more see Flash Comment: Chinese house prices cool further, 22 February 2017.
German Ifo expectations came out higher than expected yesterday at 104.0 in February from 103.2 in January. The current assessment indicator continued higher to 118.4 from 116.9, thereby setting a new cycle high. The figures are in line with Tuesday's strong PMI figures and point to continued strong GDP growth in Germany and the rest of the euro area despite the political uncertainty.
In the UK, the second estimate of Q4 GDP growth was released yesterday. The second estimate was revised up to 0.7% q/q from the first estimate of 0.6% q/q. In addition, we got the GDP expenditure components for Q4. As expected, the main growth driver in Q4 in the UK was still private consumption, while net exports also contributed positively.
Yesterday afternoon, French government bonds rallied after the centrist politician Francois Bayrou offered to form an alliance with the presidential candidate Emmanuel Macron. In particular, the 10-year French government benchmark yield fell by more than 7bps during yesterday's trading session, thereby tightening more than 5bps to the 10Y German government benchmark yield. After Bayrou's announcement to support Macron the Oddschecker implied probability indicator of Macron winning the French Presidential Election rose from 34% to 38%.
As expected, the FOMC minutes released late last night gave little news, as many FOMC members have already expressed their views since the meeting. The FOMC members think the economy continues to improve but that Trumponomics make the outlook more uncertain. Although ‘many participants' expect a hike ‘fairly soon', only ‘a few participants' expect a hike ‘at an upcoming meeting'. For more, see FOMC Minutes: Only ‘a few’ seem ready to hike in March, 22 February 2017.
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