Market movers today
We have an interesting week ahead of us with the ECB meeting Thursday and the US employment report on Friday. Focus at the ECB meeting will be new growth and inflation projections and any news on a potential new TLTRO liquidity measure. For those waiting on the latter, we expect they may very well be in for a disappointment
When it comes to the US jobs report on Friday, we look for robust wage growth whereas job growth seem to be off its peak.
US-China trade talks will also continue to create headlines and we should look out for a potential date for a Xi-Trump meeting.
Finally, this week, China has the annual National People’s Congress where among other things new GDP and inflation targets are set to be announced. It is widely expected that the growth target for 2019 will be 6-6½%.
Today we will have the Euro Sentix sentiment survey and Danish currency reserve data. The latter will show whether Nationalbanken intervened again to defend the DKK.
Selected market news
Asian stocks, US futures and the Yuan are gaining this morning after a Wall Street Journal reported yesterday saying that a US-China deal is close to being finalised. A deal is said to include lifting US tariffs on USD200bn worth of Chinese goods. In order to facilitate a deal, China is reported to be offering to lower tariffs on US farm goods, chemicals and automobile imports as well as other technical measures including reducing government subsidies. As we wrote on Friday, US negotiators are targeting a meeting between Trump and Xi in mid-March, where a final deal could be signed.
Trump’s comments on Saturday at the Conservative Political Action Conference that the dollar was getting too strong initially weighed on the USD in early sessions, weakening slightly against the EUR. However, the greenback drifted stronger again and is now trading unchanged from Friday’s close. Trump also (again) lashed out at Fed Chair Powell after sentiment seemed to have gotten better between the two, after the Fed’s recent comments to conduct a more data dependent monetary policy.
The recent slowdown of the Chinese economy and its weighing on the global growth outlook has most of the world turned to Beijing this week as the National People’s Congress gets underway and will last for the next two weeks. This year’s session could show some contrast between central government spending plans and local administrations’ working realities as a Financial Times report said that provincial governments plan to cut spending by on average 5% amid slowing revenue growth. On the other hand, the Xi administration plans on continuing expansionary fiscal policy through tax cuts and infrastructure projects.
