Macro Brief: Neither good nor bad
Head of Macro Analysis
Summary: Mixed updates from China suggests that economic improvement is underway but not forcefully so. Elsewhere the market seems unconvinced by the ECB's ability to address its mandate and in the US, GDP is likely to disappoint.
In addition, the ECB Watchers conference was a quite event. Mario Draghi tired to reassure investors by stating that the European Central Bank is “not short of instruments to achieve our mandate”. He mostly pointed out to easier TLTRO terms if needed and openly discussed the benefits and disadvantages of negative rates on the banking sector profitability. However, we doubt he really managed to convince traders and investors that the ECB is well-equipped to face the coming recession.
Today’s market session includes a myriad of central bankers’ speeches and a lot of indicators, but the focus should be the third estimate of the US Q4 GDP. The consensus expects that GDP will reach 2.4% QoQ SAAR versus previous at 2.6% and personal consumption at 2.6%. However, investors should be ready to face a more disappointing print. At Saxo, we consider that there is a high risk of downward revisions of consumption and residential investment in Q4 that could push GDP lower, around 2.1-2.2%.
Today’s Calendar (All Times GMT)
9:10 ECB, De Guindos’ speech
12:30 USA, Q4 GDP
13:00 Germany, CPI
15:00 USA, Manufacturing survey from the Federal Reserve Bank of Kansas City
17:15 Fed, Williams’ speech
21:20 Fed, Bullard’s speech
Latest Market Insights
Q4 Outlook 2022: Winter is coming
- Winter is coming to the financial markets as central banks are tightening their grip. How spring will look is still a question.
European energy crisis: it will get worse before it gets betterThe winter in Europe will be tough, but whether the result is political chaos or sustainable, innovative solutions is still undecided.
A difficult and volatile quarter awaitsAs the year draws to an end, commodities continue to be at centre stage of the world with growth pockets political uncertainty.
The bright side: crises drive innovationThe positive spin on crises is that they come with solutions. It is worrisome that deglobalisation may be a response to this crisis.
Green transformation in China: renewable energy and beyondGoing green, China needs to span numerous energy sources to ensure stability, as every source comes with a challenge.
Asia: Intermittent solutions, but a faster renewable adoption curveAsian energy supply is being squeezed. This and the adoption of renewables may change the investment sentiment in the region.
FX: A Fed thaw needed to deliver a sustained USD turn lowerThe US Dollar can keep momentum when the Federal Reserve continues to tighten, leaving the rest to play to their drum.
Autumn can become ugly for equities and bond holders. Comfort for Dollar longsTechnical analysis suggests that equities could face a tough Q4 as could fixed income. US Dollar positions could provide some upside.
The next stock market sector to watch, with stocks going nuclearAs the world scrambles to find affordable, sustainable energy, nuclear is getting attention from politicians and investors alike.
The crypto space is getting cold when the hype disappearsCryptocurrencies face a winter of their own as retail investors and governments are asking tough questions.