Market movers ahead
- In the US, Donald Trump’s speech to Congress on Tuesday will be monitored closely, as a few weeks ago he promised that he would announce ‘something phenomenal in terms of tax’.
- In the UK, the so-called ‘committee stage’ begins on Monday, when the House of Lords is due to discuss and vote on amendments to the EU exit legislation.
- Next week is also packed with interesting data releases: in the US, PCE core inflation for January, which is due on Wednesday, could be important for timing the next FOMC rate hike and in the euro area we expect HICP inflation to rise further in February.
- In Scandinavia, we also have a very busy week in terms of data releases. Most noteworthy are Swedish Q4 GDP data and Norway’s NAV unemployment report. Finally, the currency reserves figures from Danmarks Nationalbank (DN) will show whether DN sold DKK in FX intervention to fend off the upward pressure on DKK in February.
Global macro and market themes
- Holding an EU/euro referendum would be difficult for Marine Le Pen without strong parliamentary backing.
- EUR periphery spread widening if Le pen wins but ECB set to stand ready to ease financial spillover.
- In FX markets, we would expect the EUR to weaken versus other major currencies and EUR/USD to settle 2-3 figures lower.
- Nordic FX and FI markets are set to see safe-haven inflows in the case of a Le Pen win.