The return of volatility

Market movers ahead

  • Higher US yields and sharp stock market declines have been two major topics this week. Volatility may persist in the short term as the earnings season continues next week but we still expect equities to move higher over 3-12M (see also page 5).

  • Brexit negotiations enter a crucial week with the EU summit coming up. Both the EU27 and the UK seem optimistic.

  • On Monday, the Italian government is due to submit its 2019 budget proposal to the EU. Eventually, we expect the Commission to voice a negative opinion and ask for a revision.

  • We do not expect the US Treasury to declare China a currency manipulator when it publishes its FX report, due out next week.

  • In Sweden, we expect Valueguard prices to show Stockholm flat prices fell by a minor 0.2% m/m. We still look for further price declines down the road, on the back of the pent-up supply of newly produced flats.

 

Global macro and market themes

  • Equity self-off is temporary, equities are still set to move higher in 3-12M.

  • China has eased monetary policy but does not want the CNY to depreciate too quickly.

  • The IMF has cut its global GDP growGlobal macro and market themesth forecasts slightly.

  • Brexit optimism has led to an appreciation of the GBP.

 

Focus

  • Flash Comment – Will the US label China a currency manipulator? Not likely, 10 October.

Download The Full Weekly Focus

 

This publication has been prepared by Danske Bank for information purposes only. It is not an offer or solicitation of any offer to purchase or sell any financial instrument. Whilst reasonable care has been taken to ensure that its contents are not untrue or misleading, no representation is made as to its accuracy or completeness and no liability is accepted for any loss arising from reliance on it. Danske Bank, its affiliates or staff, may perform services for, solicit business from, hold long or short positions in, or otherwise be interested in the investments (including derivatives), of any issuer mentioned herein. Danske Bank's research analysts are not permitted to invest in securities under coverage in their research sector.
This publication is not intended for private customers in the UK or any person in the US. Danske Bank A/S is regulated by the FSA for the conduct of designated investment business in the UK and is a member of the London Stock Exchange.
Copyright () Danske Bank A/S. All rights reserved. This publication is protected by copyright and may not be reproduced in whole or in part without permission.