Market movers today
In a week relatively quiet on data releases, the main focus in financial markets will be on the ECB, Riksbank and Norges Bank’s meetings on Thursday. We expect the ECB to announce a QE extension of nine months at a pace of EUR30bn, while we do not expect any changes to the bank’s forward guidance. In terms of the Riksbank meeting, we expect an unchanged inflation and rate path as well as no news on the QE programme, while we expect Norges Bank to try to say as little new as possible as is the tradition at these interim meetings and given the scarcity of significant new information – although financial market participants will have a slightly dovish expectation of the meeting given the notably weak inflation print. Focus this week will also be on the ending of the Chinese Polit ical congress.
In terms of economic releases today, there is very little in the calendar but watch out for Japan PMI manufacturing number for October on Tuesday morning.
In Denmark, there is little on the agenda in the coming week but it will be interesting to see what happens to consumer confidence on Monday. The indicator has generally been upward bound this year but has softened over the past two months, after hitting a two -year high in July.
Selected market news
The election in Japan gave a solid victory for Prime Minister Shinzo Abe as he retained his twothirds majority. Given the election victory, he is expected to cont inue the soft fiscal and monetary policy. The Asian equity market s rallied and the yen weakened on the back of the victory.
The situation in Catalonia continues to escalate as Spanish Prime minister Mariano Rajoy is set to trigger article 155 of the Spanish constitution this week. Rajoy will then proceed to take over the government of Catalonia. The party leaders of the Catalan parliament will meet today and the regional president Carles Puigdemont and his allies are suggesting that they could declare independence this week.
The DBRS review on Portugal on Friday has been postponed until 3 November. Recently, the DBRS published a positive comment on the Portuguese economy and the fiscal results obtained so far. There is still plenty to do for the Portuguese government but given the comment a change in the out look from stable to positive is most likely. This will keep momentum for the spread compression to core EU and peers such as Spain and Italy.
