US dollar remains under pressure

Danske Research Team Danske Bank A/S

Market movers today

It is a very quiet start to the week with no important data today. Two Fed speakers are due to speak. Harker (voter, hawkish) and Kashkari (voter, dovish) may give more insight into the scope for a rate rise in June.
In the rest of the week, German ifo (Tuesday), Euro Flash PMI (Wednesday) and the OPEC meeting (Thursday) will be in focus.
In the Scandi count ries, employment data and retail sales figures in Denmark are due out .

Selected market news

Asian stocks are edging higher this morning, following caut ious gains on Wall Street on Friday, though the US dollar remains under pressure as Washington's political turmoil undermines confidence in t he out look for Trump's economic policy. Market focus this week is likely to remain cent red on what is happening around Trump. In his inaugural t rip overseas, US President Donald Trump called on Arab leaders to do their fair share to drive out terrorism from their count ries in a speech in Saudi Arabia on Sunday. More ‘headlines' will hit t he market as t he trip progresses, with the NATO meet ing and the G7 summit at the weekend being the most important events.

Meanwhile, North Korea fired another ballist ic missile into waters off its east coast yesterday, its second missile test in a week. This also complicates plans by South Korea's new President Moon Jae-in to seek ways to reduce the conflict with his neighbour. Tensions are rising fast between the US and North Korea and a further escalat ion of the conflict is likely if North Korea cont inues with plans to carry out another nuclear test (see also Research: The rising risk from North Korea - and what it means for markets, 27 April 2017).

With political risks in Europe somewhat abat ing, after Emmanuel Macron's win in t he French presidential election, focus today shifts back to Greece's debt problems, as eurozone finance ministers meet in Brussels to discuss the issue of debt relief. The Greek parliament narrowly approved another reform package last week, containing spending cuts and reduct ions in pensions and tax allowances, t riggering renewed st reet protests. The open issue, however, remains a possible debt relief for the country, which the IMF demands as a prerequisite to part icipate in further funding, but EU leaders, especially Germany, are still opposing. A deal is needed for Greece to draw its next instalment of bailout aid and make a EUR7.5bn debt repayment in July; however, it is quest ionable whether an agreement between the part ies can be reached today. Should a deal on debt relief be found, Greece might issue its first sovereign bond in three years as early as July, to test market appet ite before its bailout programme expires in mid-2018, according to Greek officials.

OPEC and other oil producers seemed on course to an agreement to extend supply cuts at the meet ing on Thursday, with Saudi Arabia saying most part icipants are on board with the plan to rein in a global supply glut . An extension of the supply cuts seems also largely priced into the oil market now, with Brent crude trading at USD54.1bl this morning.

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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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