Market movers ahead
- In the US, we estimate core CPI inflation stood at 1.7 in December.
- In the euro area, the minutes from the ECB’s December meeting are the highlight next week. We intend to look primarily for nuances in the assessment of the new staff projections, in particular on inflation.
- We estimate Chinese CPI inflation rose to 1.9% y/y in December.
- In the Nordic countries, inflation is in focus and we are set to get December figures for Denmark, Sweden and Norway.
- In Sweden, we also get the Riksbank Minutes from the previous meeting, which we hope will reveal a discussion on property prices and the importance that Board members attach to recent developments.
Global macro and market themes
- ‘Reflation’ beliefs have been spurred anew by a continued strong global cyclical stance, the enactment of the US tax reform and commodity-price rises. However, we doubt that 2018 will be the year when the global economy ‘reflates’, despite what looks like a benign growth environment near term.
- Central bank pricing appears increasingly aggressive in our view and we see potential for eventually fading ‘reflation’ hopes to postpone expectations for a first ECB hike, while the case for a Fed March hike could stay alive for now. This should send EUR/USD firmly below 1.20 in Q1.
