Market Movers ahead
- We look for a rise in the US PMI in February, while the index for Europe is likely to show that the recent upward trend has ended. We expect both indices to show, however, that activity remains solid.
- Minutes from the recent FOMC meeting due for publication next week are unlikely to reveal much new. Instead, the market should turn its focus to speeches from a number of FOMC members for hints on monetary policy.
- In the UK, the House of Lords is set to start debating Article 50 on Monday.
- In Norway, the oil investment survey for Q1 is set to be published next week. We do not expect significant changes compared to the latest survey.
Global macro and market themes
- After a lot of political noise, the Trump administration is finally starting to gear up the economic policy agenda.
- This may reignite the second leg of the ‘Trump trade’ following a brief pause.
- We recommend positioning for a stronger USD and a leap higher in US equity markets in coming months.
- US yields may also increase but the crux is the Fed’s reaction to Trump’s fiscal plans.
- A stronger USD and higher US yields, together with a Chinese economic slowdown, are likely to weigh on emerging market currencies over the next few months.