Market movers today
Focus today will be on the ECB Forum at Sintra , where ECB President Mario Draghi will give an introductory speech at 10.00 CEST and also participate in a panel with the Bank of England’s Mark Carney and former Fed vice chairman Stanley Fischer at 16.00 CEST, see the full programme for the forum here . We expect Draghi to strike a dovish tone at the conference.
On the data front ,we have final Euro inflation for May and the German ZEW sentiment index for June. In the US, data on building permits and housing starts are due to be released. Housing should perform well following the sharp decline in mortgage rates and high consumer confidence.
We have just published our Nordic Outlook with updated economic forecasts and overviews for the Nordic countries. The Nordics have been resilient in general in the face of recent global weakness, with exports still supporting growth, but domestically, the Nordics are moving in different directions. We see very little domestic demand growth in Sweden and it is also slowing markedly in Finland. Norway, on the other hand, is supported by oil investments. The Danish economy is slowly decelerating with growth still above trend.
Selected market news
It was another miscellaneous and cautious trading session in Asian stock markets as they were in ‘wait-and-see’ mode ahead of decisions by the US Fed and other central banks. Today the Fed starts a two-day meeting. Both the USD and Treasuries remained steady, while the JPY headed up. Crude stayed lower on OPEC’s inability to set the exact date for the next meeting on oil production cuts.
The AUD slid to a five-month low as the RBA’s dovish minutes from the June meeting revealed that the central bank could ease further in order to boost inflation and wage growth. In June, the RBA already cut to 1.25% to keep the economy running.
New home prices in China climbed at the fastest pace in five months, increasing 0.7% m/m in May versus a 0.6% m/m rise in April, making it harder for the government to control bubbly housing markets. This rise marks the 49th month of consecutive increases. China has constantly pressed local governments to keep housing prices under control. However, the latest easing of credit conditions by the government has kept the housing market strong.
The US declared it will deploy 1,000 more troops to the Middle East for defensive purposes, emphasising concerns about a threat from Iran. The latest deployment is a new addition to the 1,500-troop build-up announced in May.
UK Finance Minister Philip Hammond is “prepared to resign” over Prime Minister Theresa May’s legacy spending plans, as tension between officials at the Treasury and the prime minister’s office have reached boiling point over May’s spending intentions.
