Danske Research Team
Danske Bank A/S
Market movers today
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Today is set to be a relatively quiet day in terms of data releases.
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Focus is on the US, where University of Michigan Consumer Confidence for August is due for release. In the wake of increasing tension and harder rhetoric between the US and North Korea recently, we expect the consumer confidence figure to be lower than the previous mont h's. Furt hermore, Fed's Kaplan (voter, dovish) also speaks today.
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The Canadian CPI figures for July will also be of interest , in light of the recent hawkish turn of the Bank of Canada and markets will focus on whet her the BoC's projected rebound in inflation will actually materialise, despite falling inflation expectat ions.
Selected market news
ECB minutes yesterday revealed that the Governing Council expressed concern over risk of euro overshooting. The effective euro has strengthened further since the ECB meeting in July. On the back of the ECB minutes EUR/USD slid and the EUR fixed income market rallied slightly.
Yesterday, euro area headline and core inflation in July were confirmed at 1.3% y/y and 1.2% y/y, respectively. Service price inflation (~60% of core inflat ion) was revised slightly higher to 1.6% y/y and therefore it was unchanged from June. Non-energy industrial goods price inflation (~40% of core inflat ion) was lifted by durables goods price inflation. Looking ahead, we expect the stronger euro to drag down this part of service price inflation.
US President Trump abandoned plans to create an infrastructure advisory council yesterday. Last month Trump signed an executive order to establish the advisory council with members drawn from realestate, construction, transportation and other sectors of the economy (see Reuters, 17, August ).
US initial jobless claims released yesterday fell to 232k in July (from 244k), which is the lowest level since February. This adds to signs showing some re-acceleration into H2 18. The Philly Fed business condi tion index fell slightly to 19.5 from 18.9, which was still higher than consensus at 18.0.
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