Most important events and releases in the week ahead – Nordea

Nordea Markets' analysts think that in the upcoming week, it will be interesting to see whether the FOMC minutes will offer any clues on what the trigger for potentially more easing could be.

• “The widespread narrative that the global growth slowdown is caused by “Trump’s trade war” is false, which makes the current situation more dangerous than it needs to be. It likely also means that the Fed will be less inclined to listen to the market, should a Phase 1 trade deal be signed.
• The USD liquidity situation is now seemingly under control again as the effective fed funds rate is now back in line with the interest on excess reserves. Could the minutes hint that the Fed is definitely not on a pre-set 60’Bs a month course? In such case, the QE narrative would be challenged.
• On Thursday morning we will watch the South Korean trade numbers, since they provide early signals for both world trade in general but also earnings growth worldwide. Markets have been looking for a rebound in South Korean export numbers lately (among other things due to base effects).
• On Friday, we have a make it or break it data print from the Euro area. PMIs are out, and the market has already concluded that the Euro-area PMI outlook has bottomed out. If you ask Sweden, that is not the case by any means. Sentix and ZEW investor expectations speak in favour of a substantial rebound.
• Christine Lagarde will speak in Frankfurt ahead of the PMI release, which makes it too early to expect her to pave the way for more easing. We still consider the euro-area outlook on both growth and inflation so weak that another easing package is needed by March 2020 (double up on QE and another 10bp cut).”