Market Movers ahead
- We are heading for another relatively quiet week, with no major movers in the US or Europe.
- In the US, we expect inflation pressure to have remained muted in October with the headline CPI inflation rate falling to 1.9% y/y from 2.2% in September, while the core inflation rate will remain at 1.7%.
- In the euro area, focus will be on the German GDP estimate for Q3, where we expect another solid GDP figure with 0.6% q/q growth, as PMI in August and September remained at a high level.
- In the UK, we expect the CPI figures for October to show a small uptick, driven mainly by lingering effects of the weak GBP.
- In Sweden, October inflation is in focus this week, where our CPIF forecast is spot on the Riksbank’s, i.e. at 1.9 % y/y.
- In Denmark and Norway, the Q3 GDP releases are likely to show q/q growth rates of 0.5% and 0.7%, respectively.
Global macro and market themes
- Emerging markets have seen a strong run this year.
- Global and domestic factors should continue to be mildly supportive for EM near term.
- However, a slowdown in China in coming months is a risk as are large unfinanced tax cuts in the US, if pushing up US yields.
- The recent surge in oil prices is being driven mostly by geopolitical concerns due to tensions in the Middle East.
- The longer-term growth outlooks in EM differ widely. India and the rest of EMs in South East Asia boast strong growth potential but LATAM countries and Russia have a more muted longer-term outlook.
