Allan von Mehren
Danske Bank A/S
Market movers ahead
In the US, we believe the recent tightening in financial conditions and increased uncertainty on global growth will sway the Fed to keep rates unchanged at its meeting next week, despite a strong labour market and solid domestic demand.
In the UK, we have several important releases next week. As the Bank of England’s focus has moved to inflation, CPI inflation in August will attract the most attention. But the labour market report and retail sales will also be important releases.
In Japan, focus is on the Bank of Japan (BoJ) meeting. We do not expect the BoJ to announce additional easing measures at this meeting.
In China, focus next week will be on industrial production for August, which will provide more clues on the state of the Chinese economy.
In Sweden, the Riksbank minutes from the previous monetary policy meeting should shed light on the recent decision to leave rates unchanged.
Global macro and market themes
China acts forcefully to narrow CNH-CNY spread
Good opportunity to sell CNH and hedge receivables
Weak Chinese economy causing pain in Brazil
EM pressures continue
Strong US job data keeps Fed hike on track for December
Bond yields caught between weaker macro picture and Asian selling
Focus
China acts again in establishing a ‘single currency’ (see China: Intervention in CNH narrows CNH-CNY spread , 10 September 2015)
The Fed swayed to keep rates unchanged amid tighter financial conditions and global growth concerns.
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.
Recommended Content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.