Market movers ahead
- In the US, we expect the Fed to hike the target range to 2.00-2.25% and PCE core inflation to rise +0.1% m/m which leaves y/y unchanged at 2.0%.
- In the trade war, we are still awaiting an official response to the US invitation for highlevel talks sent on 12 September.
- In the euro area, we expect HICP inflation to slow further to 2.01% y/y driven by lower contribution from both food and energy prices.
- In Italy, it will be very interesting to see if the budget deficit is in line with EU regulations. We expect the 2019 deficit to land somewhere between 2.0-2.4% of GDP.
- In Scandinavia, we will look for Danish business confidence, Swedish retail sales and Norwegian unemployment among others.
Global macro and market themes
- The tit-for-tat trade dispute between the US and China escalated this week.
- But the market reaction was positive, as the actions were not as bad as expected.
- Indeed, both countries pushed for lower trade barriers (with other countries).
- While it will be a long and difficult road, we think a deal will be reached.
- This may actually leave the world economy better off than before the whole trade dispute started.
