Market movers today
It is time for inflation in Norway and Denmark for December. We look for Norwegian core CPI to increase from 1.0% y/y to 1.2% y/y (in line with consensus). Danish inflation is expected to be flat at 1.3% y/y.
In Sweden, Riksbank minutes are due as well as industrial data on both orders and production for November (for more on Scandi see next page).
On the global front, UK industrial production and US import prices are not likely to move the markets. The Fed’s Evans (non -voter, dovish) is due to speak this afternoon at 15:00 CET on the economic and policy outlook (includes Q&A).
After the large drop in US crude stocks seen in the API inventory report yesterday, the oil market will focus on the EIA’s inventory report today.
Selected market news
In China, CPI inflation rose to 1.8% y/y in December from 1.7% y/y in November, while PPI inflation slowed to 4.9% y/y in December from 5.8% y/y in November , according to data released overnight . Hence, inflationary pressures remain subdued in China.
Minneapolis Fed’s Kashkari reiterated his views on monetary policy yesterday, advocating for an easier monetary policy stance to push inflation and wage growth higher, stressing that lower rates are likely to have a structural cause, that inflation is low everywhere, which signals that it is not due solely to mismeasurement and that the Fed should take its cue from the yield curve.
In Italy, comments from Five Star PM candidate Luigi Di Maio suggests that its stance towards the euro is becoming more moderate as he said that it is no longer time for Italy to leave the euro as the French-German alliance is not as strong as in the past . There was limited reaction in EUR/USD to the comments.
Oil prices rallied sharply with the price on Brent crude moving past the USD69/bbl mark. Part of the reason for the rise was the American Petroleum Institute reporting an 11mb drop in crude inventories last week. We stress that in our view the extreme cold winter weather in the US this season can explain most of this decline.
