Market movers
Germany March inflation is due for release at 14:00 CET. We could see an increase in the country’s EU-harmonised inflation, supported by food and non-alcoholic drinks. Monthly inflation is expected to stay unchanged at 0.5% m/m.
The third estimate of the UK GDP Q4 17 is due for release, likely confirming the economy expanded 0.4%.
The Labour Party could vote for the final Brexit deal, according to The Telegraph quoting Shadow First Secretary of State, Emily Thornberry.
In the US February core PCE deflator, closely followed by the Fed, is out at 14:30 CET.
Turkey’s Q4 17 GDP growth data will be released, probably signalling the economic expansion is back to single-digit territory.
Selected market news
The NASDAQ index showed its worst month in two years, tumbling on US tech shares. S&P 500 fell as well.
10Y Treasury yields stayed below 2.8%. Treasury’s USD29bn auction saw the weakest demand in two years, offering a yield of 2.72%.
The USD lost yesterday’s gains against the EUR and the JPY. The US trade deficit was USD75bn in February, more or less unchanged from January. In January as well as February the trade deficit has been the biggest since the crisis.
The oil price climbed as Iraq stated that several producers are ready to prolong production cuts into 2019. Precious metals were up and base metals sought for direction.
Yesterday’s disappointing retail sales release in Norway was unexpected. Price actions in both EUR/SEK and EUR/NOK seem to underline our point that the crosses would be vulnerable to the topside heading into Easter. After we took profit on our short EUR/NOK trade on 16 March, we expressed a wish to re-enter a short position around 9.65, i.e. close to current spot. Meanwhile, we do not want to be brave on this side of Easter and with EUR/SEK in technically uncharted territory with the yearly top broken, we cannot rule out an additional leg higher in EUR/NOK. We remain long NOK/SEK and still look to re-sell EUR/NOK eventually.
Relatively big dividends yesterday and today may help to explain SEK selloff amid thin markets.
