Market Movers ahead
- In the US, we expect inflation pressure remained muted in August.
- In the euro area, wage cost growth in Q2 will probably have been constrained by still broad labour market slack.
- We expect the Bank of England to keep the Bank Rate unchanged at 0.25% with a vote count of 7-2 (vs 6-2 in August; one extra member this month).
- In China, we pay more attention to the details of the industrial production release for August, as electricity generation and steel output should reflect the rebound over the summer in the Chinese economy.
- The August inflation prints in Denmark and Norway will likely show a lower inflation rate than the previous month while going up a bit in Sweden.
- In Norway, Norges Bank’s preferred measure of economic activity, the regional network survey, is likely to rise on the back of solid momentum in the Norwegian economy.
Global macro and market themes
- Combination of strong global PMIs and postponement of US debt limit risk are good for equities.
- Trump’s debt limit deal means that return of USD scarcity is postponed, likely till 2018.
- Any dips in EUR/USD should be shallow and short-lived. EUR yields to range trade before rising next year, as markets price in an ECB tapering premium.
- Fed to begin quantitative tightening at upcoming meeting but direction next year uncertain due to vacant seats.
