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Danske Bank A/S
Market Movers
Fed’s Lockhart and Kaplan (both non-voters) are scheduled to speak today and the US labour market condition index is due for release.
Confusion regarding China’s FX policy contributed to the market turmoil last week. Focus today and throughout the week will therefore be on China and any announcements on monetary or economic policy.
Scandi markets will keep an eye on December’s CPI inflation figures in Denmark and Norway published today.
Selected Market News
Worries over the outlook for global economic growth continue to weigh on sentiment, which has sent equity markets and commodity markets plunging at the start of this week, thereby continuing the trend from last week. Stock prices in China and Hong Kong have declined 2-3% today, the price on Brent crude has dropped below USD32/bl and the price on 3M LME Copper has dropped below USD4,500/MT again. Both the CNY and the CNH have strengthened a bit today.
China’s December CPI inflation was 1.6% y/y and December’s PPI inflation was 5.9% y/y, in line with the consensus expectation, highlighting that inflation in China remains subdued.
UK Prime Minister David Cameron said on Sunday that he is confident a deal on the terms of UK EU membership can be reached next month, which means a referendum on the matter could come already this summer.
Saudi Arabia announced on Friday that it is looking into the possibility of selling shares in the state-owned oil company Saudi Aramco. It highlights (1) that Saudi Arabia needs money to finance the large budget deficit amid low oil prices and (2) that the new leadership in Saudi Arabia continues to push forward with its reform agenda.
2015 ended very well for the US labour market as 292,000 new jobs were created. The revisions to the previous months were also favourable as the two-month net revisions were +50,000. Overall, the US labour market rebounded in Q4 with on average 284,000 new jobs added after the slowdown in Q3 when 174,000 new jobs were created per month on average. In total, employment rose by 2.65m which, however, was lower than in 2014 when employment increased by 3.12m. Despite the weak activity data lately, the strong labour market tells us that the underlying growth in the US is solid.
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