Market Movers
Today's main event is the ECB meeting this afternoon. In our view, there are fewer arguments for a rate cut today than a month ago, given recent upside surprises in economic indicators and a slower pace of decline in excess liquidity (see ECB Preview: Keep the powder dry). Hence, we expect the ECB to keep rates unchanged and Draghi to refrain from explaining further the forward guidance.
We expect no change in policy at today's Bank of England meeting. Forward guidance is in place (signalling that tighter monetary policy is far off) and Governor Carney stressed in a speech last week that only in a situation where the recovery was being threatened would additional stimulus be an issue. With the recent numbers out of UK this would not be the case at this meeting. Hence no policy move this month.
In terms of data, we expect German factory orders for July to decline after a strong June.
In the US, we look for an unchanged ISM Non-manufacturing index, as weaker activity in housing-related services is offset by growth elsewhere. Further, US initial jobless claims and the ADP employment report will be the last set of labour market data received ahead of the decisive August employment report released tomorrow.
The G20 Summit begins today in Russia. On the economic front focus will be on the EM crisis and the urge for gradual withdrawal of stimulus in developed markets.
The Riksbank is due to announce its policy decision (and policy report) at 09:30. Twenty out of 20 economists in the Bloomberg survey - including us - expect the policy rate to remain on hold at 1.0%.
To Read the Entire Report Please Click on the pdf File Below.
Today's main event is the ECB meeting this afternoon. In our view, there are fewer arguments for a rate cut today than a month ago, given recent upside surprises in economic indicators and a slower pace of decline in excess liquidity (see ECB Preview: Keep the powder dry). Hence, we expect the ECB to keep rates unchanged and Draghi to refrain from explaining further the forward guidance.
We expect no change in policy at today's Bank of England meeting. Forward guidance is in place (signalling that tighter monetary policy is far off) and Governor Carney stressed in a speech last week that only in a situation where the recovery was being threatened would additional stimulus be an issue. With the recent numbers out of UK this would not be the case at this meeting. Hence no policy move this month.
In terms of data, we expect German factory orders for July to decline after a strong June.
In the US, we look for an unchanged ISM Non-manufacturing index, as weaker activity in housing-related services is offset by growth elsewhere. Further, US initial jobless claims and the ADP employment report will be the last set of labour market data received ahead of the decisive August employment report released tomorrow.
The G20 Summit begins today in Russia. On the economic front focus will be on the EM crisis and the urge for gradual withdrawal of stimulus in developed markets.
The Riksbank is due to announce its policy decision (and policy report) at 09:30. Twenty out of 20 economists in the Bloomberg survey - including us - expect the policy rate to remain on hold at 1.0%.
To Read the Entire Report Please Click on the pdf File Below.