Danske Research Team
Danske Bank A/S
Market movers
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Watch out for any headlines on US-China trade talks after The Wall Street Journal' s story that the US administration is considering reduce tariffs on Chinese imports.
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UK retail sales for December are set to provide an insight into whether consumer spending in the UK stayed robust at the end of 2018 despite the Brexit turmoil.
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Despite the sharp fall in ISM manufacturing, US industrial production probably registered another increase in December, according to consensus. In light of the ongoing US government shutdown, it will also be interesting to see whether consumer confidence from the University of Michigan for January shows the first signs of any negative repercussions. The weekly consumer confidence index from Bloomberg has moved lower recently.
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New York Fed President John Williams is also scheduled to speak in the afternoon and we will again look out in particular for any hints on the future strategy around the balance sheet.
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There are no Scandi market movers today but in Sweden Social Democratic leader Stefan Löfven will probably be approved as Prime Minister today - four months after the election took place.
Selected market news
Market sentiment was initially lifted by headlines that the US administration is considering rolling back some of the tariffs on Chinese imports but the rally was short-lived as the US Treasury denied the story soon after. In addition, the story was probably not as interesting as the headlines suggested, as the story states that the proposal comes from Treasury Secretary Steven Mnuchin (a China dove), while the US Trade Representative Robert Lighthizer (China hawk) opposes the idea. Nonetheless, we still interpret the story as another sign that a US-China trade deal is moving closer and markets probably do as well. S&P 500 ended 0.8% higher and Asian markets are also up this morning. Oil and yields are too.
In the UK, it was announced yesterday that the voting on Prime Minister Theresa May's motion on her Brexit plan B and amendments to the motion will take place on 29 January (the motion will still be presented on Monday) . A poll from YouGov has shown that support for the UK remaining in the EU is increasing. According to the poll, 56% now want to remain in the EU (versus 44% leave), which is the highest gap since the EU referendum. Polls like these increase the pressure on pro-EU politicians to call for a second EU referendum.
In Sweden , HOX-index (Valueguard home prices) came in at -0.8% in December with single family home prices leading the decrease. Sweden's residential market remains shaky and right now it is a buyer's market.
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