Market movers today
In Norway, the monthly GDP estimate for July is due out. We expect mainland GDP to climb a further 2.0% m/m in July after jumping 3.7% in June.
In Sweden, we expect the monthly production indices to show that the recovery continued in July, pointing to a positive start to Q3.
EU’s chief negotiator Michel Barnier arrives in London today for this week’s Brexit negotiations amid the UK’s threats of being satisfied with a no-deal outcome and ignoring the Withdrawal Agreement on the Northern Ireland protocol.
The 60 second overview
Russia-Germany relations. The Russian rouble weakened on the news that Angela Merkel is ready to link Nordstream 2 with the alleged poisoning of opposition leader Alexey Navalny. Near term, RUB will likely continue to be negatively affected by this and other geopolitical situations.
Brexit. As expected, the Brexit news late Sunday night weighed on EUR/GBP yesterday ahead of the Brexit negotiations, which begin today in London. As we had highlighted, the small trend lower in EUR/GBP from mid-August into early September was not sustainable, as the unresolved Brexit would eventually start to weigh on GBP again.
Equities. European equity markets rose roughly 2% yesterday on little news. US markets were closed for holiday.
FI. European yields traded in a narrow interval as we await the ECB meeting on Thursday. Irish government bonds underperformed peers as Brexit turmoil re-emerged on Sunday night and upcoming supply later this week.
FX. Despite the FI sell-off, the rebound in US inflation expectations and the move lower in oil prices, it has been a fairly quiet start to the week in FX markets. The most notable move has been the weakening of GBP. Scandies and EUR/USD are little changed.
Nordic macro and markets
Norway. Norway is set to publish the GDP figures for July. We expect them to show further recovery in the sectors that were shut down during the spring. Private consumption seems to have maintained its momentum and there are clear signs that exports have picked up. We expect mainland GDP to climb a further 2.0% m/m in July after jumping 3.7% in June.
