Danske Research Team
Danske Bank A/S
Market Movers
- Financial markets' turmoil continued to dominate price actions this week and investors are likely to look for policy responses to stabilise markets.
- In the US , minutes from the FOMC January meeting are due for release on Wednesday, which might bring a bit more shades on the different views within the FOMC. In addition, several FOMC members are scheduled to speak in the coming week.
- ECB President Draghi is set to speak to EU Parliament on Monday and his words will be scrutinised for any new comments on possible further easing. In addition, the minutes/accounts from the January ECB meeting are due for release on Thursday, which may provide indications of what instruments the ECB considers or prefers after the quite dovish January meeting.
- In the UK , focus is on the EU council meeting on 18-19 February when the draft deal between the EU and the UK is to be discussed. If an agreement is reached at the meeting, the UK is likely to hold a EU in/out referendum in June. However, the negotiations are likely to be very difficult and it is not certain a deal will be made at this meeting.
- The world is not yet facing a systemic crisis but risks are rising.
- There is an element of central bank fatigue and global growth is set to be hit by the current turmoil.
- We expect the ECB to launch a range of stimulus factors in March and the Fed to postpone rate hikes until September.
- However, risky assets could remain under pressure until there is a coordinated global policy response.
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