According to Martin Enlund, chief FX strategist at Nordea Markets, prices, politics and profits will be the main topics of the week with UK inflation on Wednesday, Euro-area inflation on Thursday and Japanese inflation on Friday.
“The Fed is far ahead the curve in its normalisation attempts and has now signalled its intention to wait and see before taking new steps, citing still-muted inflation as one reason, although growth uncertainties are likely to be a more significant driver behind the Fed’s shift.”
“Politics will also continue to generate headlines. Lame-duck Donald is fighting to get his wall against Mexico funded, but the Democrats don’t even want to give him a barrier. In the UK, all eyes will be on the UK parliament as it votes on the Brexit deal on Tuesday. Reaching a majority looks far-fetched. If the vote fails, the tail risk scenarios could gain momentum, as the Parliament recently has changed the rules.”
“Finally, the US reporting season will kick off in earnest. Equity analysts have become awfully busy as of late, slashing EPS and sales estimates across the world, for cyclicals, for defensives, you name it.”
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