German Ifo might see an above consensus rise

Market movers today

• The German Ifo for March is expected to show a further increase as indicated by the rise in both ZEW and PMI index. We look for a rise to 107.4 (consensus 107.3) from 106.8 last month. The expectations index, which is the most forward looking sub-index, is expected to rise to 103.0 from 102.5, in line with consensus expectations.

• In the US, Fed’s Evans (voter, dove) is due to talk at 11:30 CET. Being a dove he will probably speak in favour of a relatively late lift-off.

• US durable goods orders for February are due. Following a sharp drop during the autumn the latest data have shown some sign of stabilisation. Consensus is for a rise of 0.5% m/m after 2.8% m/m in January.

• Danske Bank publishes Nordic Outlook. For more on Scandi markets see page 2.

Selected market news

A trendless session overnight with little more than yesterday’s slightly higher-thanexpected US CPI figures to drive markets. Equities saw very limited moves in both the Asian and US sessions and US Treasury ended the day a few bps lower with a bullish flattening of the curve taking place. EUR/USD has dropped below the 1.10 level again and Brent crude oil is back around USD55/bbl.

Recently, focus in emerging markets (EM) has centred on whether those countries with USD-denominated debt will be able to weather recent USD strength. In our view, today’s largely flexible exchange rates in most EM countries go a long way in avoiding a 1990s repetition. Notably, overnight the Brazilian central bank said it would start to scale back its long-standing support for the BRL. This should indeed be viewed as an attempt to facilitate the much needed adjustment in Brazil by allowing the currency to weaken further.

Iran’s negotiations with the P5+1 group regarding its nuclear operations are set to continue with expectations mounting that a deal could be reached as the month draws to a close. Since Rouhani became president back in 2013 negotiations have proved increasingly fruitful and lately disagreements have shifted to the extent and pace of Western sanctions potentially set to be lifted in the event of a deal. US Congress and Iran’s supreme leader, Khamenei, likely still stand in the way of a more permanent solution but an easing of Iran’s oil export options would clearly add to an already oversupplied global market and could thus depress the oil price further.