Weekly Focus: More to Worry About

Weekly Focus: More to Worry About

Market movers ahead

  • In a week with few important data releases and scheduled events, we expect markets to remain focused on global politics – there have been encouraging signs on trade policy lately but increasing worries over Syria and the US-Russia relationship.
  • US retail sales should be interesting, as they have been weak lately but the underlying case for consumption growth remains strong.
  • UK data is likely to show increasing wage growth and core inflation, supporting the case for a rate hike next month.
  • We expect a lot of attention on Swedish house prices for March – our indicator shows that the decline in Stockholm apartment prices continued and there was a very large decline in trading activity.

Global macro and market themes

  • Geopolitical risk has resurfaced but despite the heightened uncertainty from a weakening growth cycle and the trade issue, volatility has stayed subdued and market moves have generally been muted with the RUB a key exception.
  • We still expect equities to rebound, while rate and FX markets are taking a breather from recent ECB and Riksbank repricing and the USD decline.
  • Norwegian inflation was much lower than expected in March, but that was only due to temporary factors, and the new wage agreement actually points clearly towards higher inflation.

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