Market Movers ahead

  • Focus continues to be on US-China trade talks and the scope for a phase-one deal. We expect a deal to be reached over the next month but there have been reports that it could drag out further due to disagreements on tariff roll-back and Chinese agricultural purchases.
  • On the data front, focus is on signs of a bottom in the global business cycle. US core durable goods orders and private consumption will help us gauge what Q4 GDP growth looks like. In the euro area the German IFO index is set to give clues whether German industry has passed the low point.
  • We expect November euro area core inflation to be unchanged at 1.1%, while US core PCE inflation is expected to be unchanged at 1.7%.
  • In Scandi focus turns to consumer and business surveys and Q3 GDP in Sweden as well as unemployment and retail sales in Norway.

Weekly Wrap-up

  • US-China tensions flared up again as the US Senate passed a bill on Hong Kong, which angered China. However, it did not seem to affect trade talks, as the Chinese chief negotiator continued to signal cautious optimism on a trade deal.
  • European PMIs for November showed that the manufacturing recession has stopped intensifying (suggesting that the worst is probably behind us).
  • ECB and FOMC minutes confirmed that both central banks are on hold.
  • After a strong month, market sentiment turned jittery this week following more mixed signals on US-China trade talks. Equity markets have increasingly priced in a phase one deal.

Full report in PDF.

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