Market movers ahead
- We estimate CPI core inflation for July is unchanged at 1.7%. Inflation remaining low should keep the US Fed on a cautious path in its normalisation of monetary policy.
- German industrial production for July may indicate whether the strong momentum in Q2 has continued in Q3. High business confidence points to further solid growth.
- In China, attention is set to be on currency reserve, trade and inflation numbers. We estimate the currency reserve (which is measured in USD) has increased due to the revaluation of non-USD reserves, as the US dollar weakened considerably in July.
- The focus in Scandinavia will be on Swedish industrial production and Norwegian inflation. We expect figures for Swedish industry to show handsome growth, while inflation in Norway is likely to have fallen slightly in July, following a significant rise in June.
Global macro and market themes
- The outlook for global investment is turning more positive. Business confidence is high, profit growth has risen substantially, real interest rates are at a historical low and political uncertainty has held back investment for several years.
- A self-reinforcing capex recovery could strengthen global growth and presents a slight upside risk to our global growth forecasts.
- The key risk factors to monitor are tensions with North Korea and the potential for a trade war if the US implements protectionist measures to shield US industry.
- We look for equities and bond yields to range trade before moving higher in 2018 on the back of a continuing recovery in the global economy.
