Market Movers ahead
In the US, we expect November manufacturing PMIs to stabilise around the current level of 55.7.
We expect another decline in euro area manufacturing PMIs in November.
The European Commission is expected to issue its final opinion on Italy’s budget. We expect the European Commission to start the process of opening an excessive deficit procedure (EDP) against the country relatively quickly.
In the UK, all eyes are on political developments and Brexit. The first question is, will Theresa May survive as party leader?
In Sweden, we get housing construction for Q3. Slowing residential construction will continue to be a major macroeconomic theme in Sweden in 2019.
Given the slightly weaker growth outlook, it will be interesting to see if Norwegian oil investment figures for Q3 once again deliver a positive surprise.
Even if May’s deal with the EU survives, the real test is in our view the vote in the UK House of Commons.
If the Italian government does not budge in the face of EU pressure, the EU can impose sanctions on Italy, but such a step will likely first materialise in H2 19, and hence we expect Italy to fade as a market theme.
On the macro front, this week saw rather disappointing growth figures. In the eurozone, real GDP only grew by 0.2% q/q in Q3 and the loss of economic momentum was particularly pronounced in Germany.