Sweden: Strong start to 2018 amid increasing US-China tensions

Danske Research Team Danske Bank A/S

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Market movers ahead

Overall, it looks like a fairly quiet week on the news front. In the US, industrial production and more Fed speeches should not give a big change to the outlook.
China GDP for Q4 is set to show growth of 6.7% y/y. This would leave overall growth for 2017 at 6.8% or 6.9%.
In the euro area, we are set to get more details on December inflation with the final release. We estimate UK inflation fell back below 3% in December.
In Scandinavia, we expect the most interesting data to be Swedish house prices (HOX), where we look for a further decline in Stockholm flats of 2.6% m/m, taking the cumulated decline to 12% since August 2017.

Global macro and market themes

We are still positive on equities, as global growth remains solid, although the acceleration phase is likely to be over soon.
Inflation remains one of the most important topics this year. Despite higher oil prices, we expect core inflation to remain subdued.
In our view, markets have priced the ECB too aggressively, as we see the first ECB hike in Q2 19.
Increasing tension between the US and China is a cause for concern.

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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.

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