Market movers ahead

  • The main event in Sweden in the coming week is the Riksbank monetary policy meeting on Thursday. We expect the Riksbank to postpone the repo rate hiking path by one to two quarters, while keeping the QE programme unchanged. In Norway, we are due to get industrial production.
  • In the US, ISM manufacturing for August is due for release on Thursday and the jobs report for August is due out on Friday.
  • In the euro area, focus is set to be on the final Q2 GDP estimate (Friday) , as we are set to get detailed information about the GDP components for the first time.
  • In the UK , focus is on Brexit, with the House of Commons returning to session.
  • In China , we are due to get the PMI data for August. Further, with the current tension between the US and China on the trade front, news about possible upcoming negotiations between the two sides could be an important driver for global risk sentiment. Even though the rhetoric from China has softened, there is still a risk that the US will go through with increasing its tariffs on Sunday as already announced.

Weekly wrap-up

  • Despite the recession fears in markets, best illustrated by the significant inversion of the US 2s10s yield curve, US consumers are quite upbeat and it is difficult to envisage a recession near term
  • Prime Minister Boris Johnson has decided to prorogue Parliament from mid-September to 14 October, making it more difficult, but not impossible, for politicians to block a no-deal Brexit.
  • In politics, the US-China trade war went from bad to worse and Italy’s President Sergio Mattarella tasked Prime Minister Giuseppe Conte to form a new governing coalition between M5S and the centre-left PD.

Full report in PDF.

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