Market movers today
This week we have a number of important events ahead of us. In the US-China trade talks, US representatives Mnuchin and Lighthizer arrived in Beijing today for negotiations. Lower level talks will take place at the beginning of the week to prepare for high level talks on Thursday and Friday. A lot of work needs to be done before a deal is on paper and we could very well be into Q2 before a deal is signed at a meeting between US President Donald Trump and Chinese President Xi Jinping, see more here .
At the same time, the US government shutdown is looming on Friday after reports this weekend saying there is no progress on wall discussions, reducing the probability of a passed budget. In the UK, MPs will have an indicative vote on how to proceed with Brexit on Thursday. Also, the Riksbank is due to meet on Wednesday.
Today, the UK preliminary Q4 GDP growth print is being released, which we estimate at +0.3% q/q (+0.1% m/m in December). The growth picture has become weaker, as Brexit uncertainties are weighing on investments and global growth has slowed.
Also today, Norwegian and Danish inflation data is due out. In Denmark, we expect 0.9% (more on page 2).
Selected market news
Stock markets continue to tread water as anxiety over US-China trade talks turned up a notch last week on the news that Trump changed his mind on meeting Xi this month. Markets are mixed in Asia with only the Chinese onshore indices higher as they play catch-up after being closed during the Chinese New Year holiday last week.
In the Brexit saga, the next thing to watch is a vote on Thursday in the British Parliament. The Strait Times have details on the vote here . In a letter to Labour Leader, Jeremy Corbyn, Prime Minister Theresa May has offered fresh concessions on workers’ rights and called for cross-party talks. An academic report published on Monday showed that British companies have invested more in the EU following the Brexit vote and that a big drop in EU investments into the UK has taken place since the referendum.
US destroyers sailed near Islands in the disputed South China Sea waters, a move that is likely to anger Beijing. However, it is unlikely to affect the trade talks, which both sides seem to agree on is a separate track from other areas of tension.
The IMF backs the Fed pausing its interest rate hiking cycle . The new Chief Economist Gita Gopinath said it would have a positive impact on the US and that the IMF endorses the Fed’s data-driven approach.