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Weekly Focus: A Slowly Fought Trade War

Market movers ahead

  • In the euro area, we project HICP inflation in March will bounce back to 1.5% y/y supported by Easter effects.
  • Several Fed members are due to speak in coming weeks, giving further insight into the future hiking pace.
  • Average hourly earnings will again be in focus in the US labour market report for March. We expect PCE core inflation figures to remain unchanged at 1.5% y/y.
  • In Japan, keep an eye on private consumption and labour market data.
  • We expect Chinese Caixin PMI manufacturing to decline, driven by financial tightening measures.
  • In Scandinavia, Danish business confidence and Norwegian house prices are due for release.

Global macro and market themes

  • The trade war is being fought very slowly.
  • The Fed lifted its rate path slightly due to Trumponomics.
  • We are keeping an eye on the increasing Libor/OIS spread.
  • The Brexit transition deal is not a game changer for EUR/GBP.

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Danske Bank
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