Fri, Jul 30, 2021 @ 02:11 GMT
HomeContributorsFundamental AnalysisWeekly Focus: Central Banks on Hold, But Plenty of Political Drama

Weekly Focus: Central Banks on Hold, But Plenty of Political Drama

Market movers ahead

  • At Wednesday’s FOMC meeting, we expect the Fed to stay on hold, particularly in light of the recent upward revision of payrolls data.
  • Lagarde’s first ECB meeting is not expected to bring policy changes, but the ECB is likely to launch formally its long awaited strategy review – though we may not get a deadline for its completion.
  • German politics, and the survival of the Grand Coalition, is still in flux, and investors should not get too excited about a big German fiscal policy boost in the near term.
  • The UK election is coming up on Thursday. If Boris Johnson gets a solid majority, he should be able to get his Brexit deal through Parliament before Christmas and the UK will leave the EU by 31 January.
  • We may get a phase one deal in the US-China trade talks next week, as Trump is otherwise set to put a 15% tariff on another USD160bn of goods from China.
  • In Scandinavia, we will be looking at inflation figures as well as Norges Bank’s Regional survey, which we expect to project more muted growth in H1 next year.

Weekly wrap-up

  • Chinese PMIs were better than we expected, supporting our view that the worst is over and that China has begun a moderate acceleration supported by stimulus and declining trade war fears.
  • In the US, ISM disappointed, still signalling US GDP growth momentum has slowed further in Q4.
  • US President Trump has started targeting other countries on trade.

Full report in PDF.

Danske Bank
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