Market movers ahead
Markets are still focusing on the risk of a full-blown global trade war, as US President Donald Trump is likely to announce protectionist measures against China soon.
We expect the Fed to hike the target range by 25bp at next week’s meeting, while sticking to its current signal of three hikes this year.
The EU and UK are likely to agree at next week’s EU summit on a transition period lasting until year-end 2020 (deal likely to be announced before). While this is positive, the negotiations on the future relationship are likely to be more complicated.
In the euro area and the US, preliminary PMIs will give us more information about whether or not the phase of increasing growth is over for now. In China, the main number of interest is house prices.
In Scandinavia, the spotlight is on the Norwegian labour market data and Riksbank speeches.
Global macro and market themes
While an all-out trade war is still not our base case, risks remain as long as further trade measures loom.
The USD is likely to be a victim of increased US protectionism.
The global reflation theme has lost some momentum lately but we still expect the Fed to hike next week and to pencil in three hikes for 2019.
