Markets: What is most important in the week ahead? – Nordea Markets

Martin Enlund, analyst at Nordea Markets, suggest that next week has a fair amount of key releases on offer but begins with European politics, with ECB meeting being the most important event for the week.

Key Quotes

“On Tuesday, UK Prime Minister Theresa May likely faces a losing vote on her Brexit agreement (the vote might also be postponed) A big defeat could bring her government down, while a smaller loss could perhaps bring another, second vote.”

“On Wednesday, Euro-area industrial production for October will be unveiled.”

 “US core inflation will also be released on Wednesday. US core inflation has disappointed three times in a row and could face further setbacks in the wake of this year’s dollar strength and strong productivity. If such downside risks to US core inflation continue to materialise, the market will continue to struggle to price in Fed rate hikes in 2019.”

“On Thursday, the ECB will unveil its latest monetary policy decision. Any change to the monetary stance is highly unlikely. Focus will be on the revised projections, reinvestments and any news on the possibility of new TLTROs. The ECB projections on growth and inflation will certainly be revised downwards, but the ECB is likely to interpret recent growth weakness as partly temporary.”

“Euro-area PMI numbers are released on Friday. While we have been stressing downside risks to Euro-area PMI numbers throughout the autumn, we do not want to do so ahead of this release. Our models are inconclusive, some even suggest an improvement to PMI composite, which if it materialises would be a significant positive surprise given how bearish the consensus has become.”

“In Scandinavia, Norges Bank’s rate decision takes centre stage on Thursday (we think the rate path will be hawkish vs market expectations) , though it’s not as if there’s a dearth of other releases and events.”

 

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