Looking for solid indicators to kick off 2017

Danske Research Team Danske Bank A/S

Market movers ahead

We get the first indications on 2017 activity in the US with the release of the preliminary Markit PMIs for January. We also get the first estimate of Q4 16 GDP growth. We estimate Q4 GDP growth was 2.3% q/q AR mainly driven by private consumption.
In the euro area, we get consumer confidence for January. It has improved since last summer and we expect to see a modest increase for January as the labour market still shows strength. We also get euro area PMIs for January. We expect both manufacturing and service PMIs to increase.
In the UK, the main event is the Supreme Court ruling on Tuesday. It seems as if Theresa May has accepted that parliament needs to be involved in the Brexit negotiation process, as she has mentioned the final deal will be put to a vote in both Houses of Parliament.

Global macro and market themes

Trump inauguration, May’s Brexit speech and China’s presence at Davos may well mark the end of the world as we know it.
Markets taking a relatively relaxed view on risk with the VIX index trading close to decade lows...
...and awaiting a more concrete economic policy announcement from the Trump administration.
The possible shift towards more protectionism may well hurt the global economic outlook.
We are bullish on Russia, which is a likely winner from the new era.

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Author

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.