Market movers ahead
- In the US, we believe ISM manufacturing data released on Monday is likely to increase to an even higher level in line with regional PMIs.
- Next week’s US labour market rep ort will, in our view, be strongly affected by Sep tember’s hurricanes and will not reflect underlying labour market strength.
- In the euro area, we expect the unemployment rate to continue to decline but we still observe slack in the labour market due to a lack of productivity growth, low inflation expectations and a still high share of involuntary part-timers.
- At the UK Conservative Party Conference, we expect Theresa May to deliver a speech on Brexit underlining that the UK is leaving the single market and the customs union.
- We expect Chinese manufacturing PMI to decline, due among other things to changing seasonal patterns.
- In Norway, we expect housing prices to continue to decline, as a sharp rise in the number of properties on the market, especially in Oslo, will probably put a damper on prices.
Global macro and market themes
- The natural rate of interest is key to understanding monetary policy setting in the long run, while the Phillips curve has explanatory power in the short term.
- The Bank of England’s M ark Carney argues that structural factors continue to weigh on the natural rate but that it is increasing everywhere due to the global recovery.
- While we still expect long-term yields to increase, as central banks have turned more hawkish, there is a limit to how high they can move due to the low natural rate.
