Weekly Focus - Rejection of Brexit deal and ECB ends QE programme

Danske Research Team Danske Bank A/S

Market Movers ahead

We expect the ECB to officially end the QE programme when it meets next week.
Flash PMIs for the US, Japan and euro area are due for release next week. In particular, the euro area PMIs are interesting given the negative momentum in Europe right now.
In the US, CPI inflation and retail sales data for November are due. Fed's blackout period starts ahead of the FOMC meeting in the week after next.
In the UK, the vote in the House of Commons on Theresa May's Brexit deal takes place on Tuesday. More than 400 MPs have said they will vote against the deal.
In Denmark and Sweden, inflation data for November are due out next week.
In Norway, we expect Norges Bank to stay on hold on Thursday but we expect the bank to confirm its plans to tighten monetary policy further in March.

Weekly wrap-up

Global economic key figures were slightly stronger than expected this week.
The US and China agreed on a 90-day ceasefire in the trade war.
Italy negotiations with the EU are ongoing on the size of the budget deficit.
Stock markets had a volatile week as the rally following the trade war ceasefire fizzled out on renewed uncertainty.
US 10Y Treasury yields fell sharply on growth fears and uncertainty over the trade agreement. In euro periphery markets we saw spread tightening on softer signals from the Italian government.
USD/CNY saw the biggest two-day decline since 2005.

Download The Full Weekly Focus

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.

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold clings to gains just above $5,000/oz

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The precious metal’s move higher is also underpinned by the slight pullback in the US Dollar and declining US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.