Summer and the SEK – EURSEK undervalued
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• We expect CPI inflation to be up by 0.4% m/m in February. • The rise can partly be explained by higher clothing and footwear prices. • If we are right, the difference versus the Riksbank’s forecast will narrow.
• Inflation will stabilize • Back in line with Norges Bank’s forecast
Instant view: The Statistics Sweden’s investments survey was a bit disappointing as for the manufacturing industry. Companies plan to increase investments by a modest 2% for 2014. Moreover, companies are almost always too optimistic in the February survey. On average, companies have overestimated investments by 8% the past 10 years, suggesting that investments will fall in the manufacturing industry in 2014.
Instant view: The monthly indicator of household consumption in January rose by 1.0% over the month and by 0.9% over the year.* This was higher than our forecast and also stronger than the previously released figures for retail sales.
• Fed’s Plosser says tapering too slow • Obama expresses support for Ukraine
Payrolls day; following better jobless data and weaker ADP data market is probably not too far from the consensus. Bond yields rose yesterday as equities were bid and ECB disappointed some. The situation in Crimea takes a turn for the worse--keep an eye on it still. Greece's biggest bank set to tap markets.
The ECB kept rates on hold as 40 out of 56 polled by Bloomberg – including us – expected. The ECB also decided to continue sterilising its sovereign bond holdings under the SMP. Rates rising and the EUR/USD reach 2014-highs.
Short rates have come up and the market is now pricing Norges Bank on hold until late 2015. Would Norges Bank, if it were to publish an interest rate forecast today, change its forecast?
Given proximity, strong trade (and other) relations with Central and Eastern Europe and heavy reliance on Russian oil and gas, Germany has a special interest in the stability of the region. The current deceleration in Russian growth alone does not threaten the upswing of the German economy. However, a combination of adverse shocks on several important export markets could. Watch out for export expectations and foreign order intake.
• Beige Book shows higher activity in 8 of 12 districts • Employment important for Chinese economy
Draghin viesti meni perille, EURUSD-kurssi hipoo jo tasoa 1,39. Nousua 3% helmikuun alusta. #EUR #EKP
@VictorKerezov USDCAD lower?
@Kateryna_Kruk very interesting twist!
@GoodrichWatts Zaphod was @LorcanRK