Market movers ahead

  • Higher US yields and sharp stock market declines have been two major topics this week. Volatility may persist in the short term as the earnings season continues next week but we still expect equities to move higher over 3-12M (see also page 5).
  • Brexit negotiations enter a crucial week with the EU summit coming up. Both the EU27 and the UK seem optimistic.
  • On Monday, the Italian government is due to submit its 2019 budget proposal to the EU. Eventually, we expect the Commission to voice a negative opinion and ask for a revision.
  • We do not expect the US Treasury to declare China a currency manipulator when it publishes its FX report, due out next week.
  • In Sweden, we expect Valueguard prices to show Stockholm flat prices fell by a minor 0.2% m/m. We still look for further price declines down the road, on the back of the pent-up supply of newly produced flats.

Global macro and market themes

  • Equity self-off is temporary, equities are still set to move higher in 3-12M.
  • China has eased monetary policy but does not want the CNY to depreciate too quickly.
  • The IMF has cut its global GDP growth forecasts slightly.
  • Brexit optimism has led to an appreciation of the GBP.

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