Danske Research Team
Danske Bank A/S
In focus today
Today is light in terms of tier-1 data releases. Hence, focus will be on the German ZEW figures coming at 11.00 CET, where analysts expect -74.0 for the current situation figure, and 35.0 for the expectations figure. Both mark lower prints and as such less optimistic conditions than what was seen in July. This is also what the downbeat Euro Sentix data suggests.
This morning, we also get both the 3M average unemployment figure as well as the 3M average y/y seasonally adjusted wage growth (ex-bonus) figures out of the United Kingdom. Both are scheduled for release at 08.00 CET. Analysts expect unemployment to come in at 4.5% (slightly up from last month's 4.4%), whereas wage growth (ex-bonus) is expected to come in at 5.4% (slightly down from last month's 5.7%).
In the US we get PPI numbers for July at 14.30 CET. Analysts expect both the headline and core figures to stand at 0.2% m/m. The measure could provide the market with early clues on how inflationary pressures have developed into the late summer. NFIB's small business survey is also due for release today, and its price plans measure has been a decent leading indicator for the CPI as well.
Fed's Bostic (voting member) speaks tonight at 19.15 CET.
Overnight the Reserve Bank of New Zealand announce their cash rate. We expect them to keep it unchanged at 5.50%, but it will be a close call between a hold and a 25bp cut.
Economic and market news
What happened overnight
US equity futures look mostly flat this morning, reiterating that investors are gearing up for inflation numbers to come. In the commodity space, Brent oil is down around 1% this morning trading at around USD81.5/bbl.
What happened yesterday
In Denmark, CPI inflation came in at 1.1% y/y (prior 1.8% y/y). The low print and rather big drop from last month was expected given how the 2023H1 electricity tax break is no longer present, and as such skewing, the y/y figures.
In the US both 2- and 10-year yields dropped a few basis points. In the (very) short end of the curve yields were also slightly lower on the session albeit more modestly. The moves in yields to kick off the week wane in comparison to last week's market moves, as investors have their eyes set on today's PPI as well as tomorrow's CPI. They will be looking out for signals as to what to expect next from the economy, after recession fears got hold of markets last week.
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