ECB Surprises By Cutting Interest Rates

Published 09/05/2014, 02:13 AM
Updated 05/14/2017, 06:45 AM


Market Movers ahead

In the US we are heading towards a light week with retail sales and Michigan consumer sentiment survey the most important data releases.

Euro area industrial production for July is due for release and will provide initial indications as to how Q3 will turn out in terms of real activity.

In China, consumer prices, credit and foreign trade data for August will be released next week. In Japan, minutes from the August BoJ meeting will be published.

In Scandinavia, inflation numbers will be important. In Sweden we believe they will be very much in line with the Riksbank's forecasts without any major change. In Norway we expect inflation to have slowed from 2.6% in July to 2.3%.

Global macro and market themes

The ECB surprised by cutting interest rates further as well as starting a program of buying Asset Backed Securities and covered bonds. We expect ECB measures to underpin a growth rebound later this year.

There has been a series of very strong US data, signalling that the recovery is gaining strength. We expect the Fed to move its expectations of the first hike forward in the upcoming new projections in relation to the Fed meeting.

Bank of Japan not as dovish as expected, government reshuffles

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