Market movers today

Compared to yesterday we have a busier day ahead of us with lots of interesting data releases, not least in Scandinavia. In Norway, CPI inflation and the Regional Network Survey are due out at 08:00 CET and 10:00 CET, respectively, and in Sweden Prospera inflation expectations and household spending are due out at 08:00 CET and 09:30 CET, respectively. We also have Danish CPI inflation data due out at 08:00 CET. For details see overleaf.

Globally, we have the monthly UK GDP estimate for October at 10:30 CET. The UK PMIs suggest that underlying growth remains weak, driven by slower global growth and high Brexit uncertainty. At 11:00 CET, German ZEW expectations are due out and they are expected to show a small rebound. At 12:00 CET, US small business optimism from NFIB is due for release.

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Note that YouGov is set to publish a new seat projection for the upcoming UK election tonight (23:00 CET). The last prediction released a couple of weeks ago showed a solid majority for the Conservatives and given that it was the only projection that correctly projected Theresa May would lose her absolute majority in 2017, investors and Brexit watchers will analyse the results thoroughly.

Selected market news

Chinese CPI out this morning showed a reading of 4.5% (y/y, 4.3% expected, 3.8% in October). The Chinese CPI has been heavily affected by pork prices throughout 2019 due to the outbreak of swine fever and higher food prices contributed 3.72pp to the headline inflation. Core inflation came in at 1.4%, which was the 15 th straight month below 2%. There are signs though, that the effect from higher pork prices is slowing, which could lead to the CPI topping out in the beginning of next year.

Yesterday, for the third Monday running, the Fed offered term repos reaching into the New Year, thus covering the crucial year-end, and for the third time in a row the operation was oversubscribed as bids for USD43bn were submitted relative to an offering of USD25bn. The Fed initially increased the offered amount from USD15bn to USD25bn after last Monday’s auction went oversubscribed. Yesterday’s repo offering was the last planned term operation providing funding over 31 December.

Turkey’s president Erdogan continues his collision course with the EU, saying yesterday that Turkey could deploy soldiers in Libya if invited by the internationally supported government there. The comment comes after Turkey and Libya officially backed a preliminary maritime and defence deal on Friday that effectively sees Turkey expanding its influence in contested waters in the eastern Mediterranean, which has led Greece to expel the Libyan ambassador to the country. The waters have become an area of great interest following large gas findings in the Cypriot sea and EU’s foreign policy chief said yesterday that the deal raises major concerns.

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