Market Movers ahead
While we await greater clarity about what policies to expect under the incoming Trump administration, next week will bring manufacturing and services PMIs in both the US and the Euro area, which we expect to show that the business cycle was on an upward trend, even before Trump won the election.
In the US, we will get data for the preliminary core capital goods orders for October, Markit PMI manufacturing and service indices for November as well as Fed minutes. We expect the manufacturing sector to have continued improving in November, while a constant service index should still point to solid growth in the US service sector. In the Fed minutes, we will look for clues to the Fed's 2017 outlook, now that a hike in December is almost priced in.
In the Euro area, we will get numbers for consumer confidence, PMI manufacturing and German Ifo business expectations. Consumer confidence may weaken a bit with increased political uncertainty in the US and Europe. We expect the manufacturing sector and Germany business expectations to improve further compared with October.
In the UK, we do not have many important data releases next week. Still, we look forward to the release of the second estimate of GDP growth in Q3 on Friday. On Wednesday, Chancellor Hammond makes the autumn statement to Parliament, which could point to weak fiscal developments in the UK limiting fiscal stimulus options.
Next week will be busy in Scandinavia, with the most important releases being consumer confidence numbers in Denmark and Sweden and the oil investment survey in Norway.
Global macro and market themes
We see a case for reflation in the US - but less so in the euro area
We expect US reflation to lead to a further rise in equities, higher bond yields and a stronger USD over the next six months.
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