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Weekly Forex Fundamentals |
Written by Danske Bank |
Jan 27 12 16:49 GMT
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Weekly Focus: Dovish Fed Keeps All Options Open
Market Movers ahead
- In the euro area all eyes will be on the EU-summit on Monday, where the main focus is expected to be the fiscal pact and Greece. However, without a conclusion on the PSI negotiations, it will be difficult to make progress with Greece.
- In the US we expect the rise in non-farm payrolls to have eased slightly (135K in January from 200K) partly due to seasonal factors. ISM manufacturing is expected to continue to edge higher in January.
- In Japan data are expected to confirm that the activity rebounded in December, but it will not be enough to compensate for an overall dismal Q4.
- In Norway and Sweden the manufacturing PMIs are expected to rebound slightly in January in line with already released flash PMIs from the Euro area.
Global Update
- The Fed statement was surprisingly dovish in light of recent encouraging US data. We now do not expect Fed to hike the fed funds rate until mid-2014.
- In the euro area better-than-expected PMIs suggest that the recession will be relatively mild.
- Japan’s trade balance showed a deficit for 2011 as a whole and the current account surplus appears to be disappearing faster than expected. This development makes Japan more vulnerable to spill over from the debt crisis.
- In Sweden both trade balance and retail sales point to a marked slowdown in growth in Q4.
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