What is most important in the coming week? – Nordea Markets

According to analysts at Nordea Markets, politics are likely to remain important across global markets.

Key Quotes

“Turkey’s lira has plummeted to new record lows in the past week, and the country would probably need massive rate hikes, perhaps capital restrictions, and/or improved relations with the US to ease the pressure on the TRY (TRY: A bloodbath). The latest US sanctions has also brought about the weakest level of the RUB since 2016, and Russia threatens retaliation (against the US). And of course, trade rhetoric will continue to be watched closely.”

“Turning to data, Chinese credit data could receive some attention when it is released over the next few days (August 10 – 15), but with China turning on the liquidity spigot in recent weeks, the market impact should be muted.”

“In the Euro-area, ZEW expectations (due 14 August) have disappointed over the past two months even though some other sentiment surveys (PMI, Sentix) have improved. It’s a volatile gauge, but at current levels ZEW expectations indicate further downside risks to the consensus’ growth estimates for the Euro area and hence bears watching.”

“Of greater importance for markets is US retail sales and industrial production (August 15). Several important US macro figures have indeed disappointed recently, ranging from ISM manufacturing, non-farm payrolls, core PCE inflation to construction spending.”

“If retail sales and industrial production also disappoint, then the economic surprise index will not only continue lower, it would also bring about a loud gnashing of teeth among those expecting the US to keep outperforming the rest of the world (as strongly). While such outcomes would be at odds with the usual seasonal pattern over the past eight years, it would be in line with our view that the cyclical momentum in the US will be slowing.”

“Norges Bank’s rate decision on 16 August is likely to be a boring one. It’s an “in-between meeting” in which it won’t even present a new rate path. Besides, everything has developed broadly in line with Norges Bank’s expectations.”