Danske Research Team
Danske Bank A/S
Market movers ahead
PMIs are on the calendar for next week. We expect the Chinese HSBC/market manufacturing PMI to decline to 49.4 in September and at the moment it looks like the manufacturing PMI will continue to edge lower in the coming months.
In the euro area, we expect the recent slight decline in the manufacturing PMIs to have continued in September, bringing it down to 50.1.
In Germany, the IFO expectations and current situation are expected to decline further as geopolitical risks continue to weigh on sentiment.
We expect the figures for existing home sales in the US to maintain their upward trend, though with lower momentum than we have seen over the past couple of months.
Global macro and market themes
The US is the preferred place of investment at the moment as the sole pillar of strength in a world of hot spots.
European stocks should be back in favour as the economy recovers towards yearend.
More USD strength ahead as the Fed hikes are drawing closer. The market is still pricing in too few rate hikes from the Fed.
Chinese weakness in housing and manufacturing raises the chance of a rate cut later this year.
Focus
- We have revised down our forecasts and expect Finnish GDP to shrink by 0.4% in 2014 and to grow by only 0.8% in 2015. Russian sanctions and related uncertainty are the main reasons behind the revision (see .Research Finland: Russiansanctions and fiscal austerity hit Finnish economy, 17 September 2014).
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