Italy countdown

Market movers ahead

  • In the US, we expect the Fed to hike the target range to 2.00-2.25% and PCE core inflation to rise +0.1% m/m which leaves y/y unchanged at 2.0%.

  • In the trade war, we are still awaiting an official response to the US invitation for highlevel talks sent on 12 September.

  • In the euro area, we expect HICP inflation to slow further to 2.01% y/y driven by lower contribution from both food and energy prices.

  • In Italy, it will be very interesting to see if the budget deficit is in line with EU regulations. We expect the 2019 deficit to land somewhere between 2.0-2.4% of GDP.

  • In Scandinavia, we will look for Danish business confidence, Swedish retail sales and Norwegian unemployment among others.

 

Global macro and market themes

  • The tit-for-tat trade dispute between the US and China escalated this week.

  • But the market reaction was positive, as the actions were not as bad as expected.

  • Indeed, both countries pushed for lower trade barriers (with other countries).

  • While it will be a long and difficult road, we think a deal will be reached.

  • This may actually leave the world economy better off than before the whole trade dispute started.

 

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