The season of central bank meetings continues

Market Movers ahead

  • An important meeting is coming up in the Swedish Riksbank, as it has to decide on whether to end QE and it is a close call as to what it will chose.

  • Higher wage growth is key if the ECB is to realise its inflation target; therefore, euro area wage data for Q3 due out on Tuesday should be watched closely.

  • The most important inflation measure in the US is likely to show slightly higher inflation.

  • The Bank of Japan is expected to announce unchanged policy but might comment on recent tightening speculation.

Global macro and market themes

  • Recent economic data releases support our view that the global expansion continues, not least in the euro area, where PMIs have been very strong in Q4.

  • It is too early for markets to price out Brexit risk just yet, but it is positive that negotiations are moving forward.

  • Central bank meetings support our view that global monetary policy tightening will be gradual.

  • The environment is positive for risk assets such as equities; we believe EUR/USD will move higher and that yields will stay low.

  • Norges Bank will hike rates late next year.

 

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