Market movers today
It is another quiet day in terms of global data releases ahead of the ECB meeting on Thursday and the US jobs report on Friday.
We have some important data releases in the Scandis today, not least in Norway. Norges Bank will publish the regional survey, which is its preferred economic indicator. We estimate the index climbed to around 1.0 in February, equivalent to roughly 2.0% annualised growth. Also, manufacturing production data for January is due out.
In Sweden, the budget balance data for February is due out.
For more details on the Scandi releases, see page 2.
Selected market news
Markets are relatively calm this morning. In the US, S&P 500 closed a bit lower yesterday and futures point at further losses today, as investors may have taken profits from the strong gains recently amid the more hawkish Fed strongly indicating a hike next week. EUR/USD is unchanged, just below 1.06. Brent oil trades at USD56 per barrel amid Iraq comments that it is ready to cut oil production further if the OPEC decides to extend its current cut policy, according to Bloomberg. As expected, the Reserve Bank of Australia kept its policy unchanged at 1.50%.
Yesterday, we published our ECB Preview: Inflation on target but still too early to discuss tapering. We expect the ECB to maintain its dovish stance at the meeting on Thursday, although inflation has reached the 2% target, as we expect core inflation will have to exceed 1.0% for a number of months before the ECB will announce tapering of its QE purchases. We still believe the ECB will extend its QE programme beyond December 2017. The ECB released QE details yesterday, see more here.
In the US, Trump has signed a new executive order banning immigration from six Muslim countries (‘travel ban 2.0’), effective from 16 March. The new travel ban tries to address some of the problematic issues raised by federal courts. Still, the travel ban is likely to face legal challenges and is likely to be centre of attention in the media coverage in coming days/weeks. For more read CNN.
In France, presidential candidate Francois Fillon got support from the leadership of the Republican party. Yesterday, Alain Juppé (runner up in the primary) said he will not run; therefore, the Republican party did not have any other choice but to back Fillon. Fillon’s campaign has suffered heavily from accusations that he paid his wife a salary for a ‘fake job’ and he is now third in the poll, meaning he is not expected to go through to the second round. The first round of the presidential election will be held on 23 April. For economic and financial implications of a Marine Le Pen win see Le Pen – What If? Implications for Euro and Nordic markets, 23 February 2017.
We expect the US jobs report, due out on Friday, to be strong enough for the Fed to hike next week. See our jobs report preview, US Labour Market Monitor: Jobs report should be more than strong enough for the Fed to hike later this month, 7 March 2017.