Danske Research Team
Danske Bank A/S
Market movers ahead
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The US presents a thin calendar next week with the most important release being the preliminary Markit PMI manufacturing index for April due on Friday. Despite the recent turnaround, we do not expect the index to go much higher in the coming months as the manufacturing sector still struggles with (among other things) the lower activity in the oil sector and tighter credit conditions.
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In the euro area the main event next week is the ECB meeting on Thursday. We do not expect any policy changes but we believe Draghi will sound dovish as inflation expectations are still very low and the effective EUR is stronger. Specifically we expect Draghi to re-open the door for rates cuts.
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Also in the euro area, data for consumer confidence for April are due. We expect a further decline albeit at a slower pace than in recent months. On Friday preliminary PMI figures for April are released for the euro area, France and Germany.
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China property prices on Monday is only release of interest next week in Asia. Prices have grown strongly in the big cities, whereas they are still declining in tier 3 and tier 4 cities where oversupply remains a big problem. We expect this picture to be confirmed by Monday’s data.
Global macro and market themes
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Risk assets supported in the medium term by recovery in the US and China and easy money.
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EM assets underpinned by China recovery.
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Downward pressure on bond yields persists.
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Brexit risk and relative rates to weigh on EUR/USD short term.
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