On Thursday, we expect the ECB to cut the deposit rate by 10bp to -0.4%, to introduce a two-tier deposit rate system aimed at reducing the cost to the banking sector and signalling the deposit rate could go even lower. We also look for the ECB to frontload QE purchases by EUR20bn per month in spring, to signal a willingness to support inflation.
In Scandi markets, the single most important event next week is the release of the regional network report by Norges Bank.
In Denmark, we estimate inflation increased to 0.8% y/y in February, up from 0.6% y/y in January.
The Fed's Vice Chair Stanley Fischer (voter, neutral) and Lael Brainard (voter, dovish) are due to speak on Monday, marking the final comments from Fed officials before the next FOMC meeting.
Global macro and market themes
Risk markets rally on better US data, a higher oil price and policy easing.
Investors should consider using any rally to buy protection as risks persist.
EUR/USD is range bound and German yields could decline further.
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