A Sense of relief

- Market movers ahead
• "There is little in the way of US events or data that can seriously be expected to move markets, partly because Monday is Labor Day."
• "Can the German upswing continue despite the problems stateside? There is much speculation about this at present, so it will be worth keeping an eye on the figures for German manufacturing orders and output. The UK and Japanese central banks are holding rate-setting meetings, but we do not see either being particularly exciting."
• "The US, China and big European economies will be releasing foreign trade data during the week, which could also say something about whether the familiar pattern is persisting, with Asia as growth engine and Europe as its big supplier."
- Global update
• "The sense of relief was tangible as incoming data painted a slightly brighter picture than in previous weeks. The strong ISM figures in particular confirm that the risk of a really hard landing in the US is relatively small."
• "In Europe, we had evidence that the upswing is becoming broader-based, and the PMI data from China indicates that the recent downturn in manufacturing there is over. On the other hand, the Bank of Japan disappointed with its not particularly ambitious easing of monetary conditions."
- Focus
• "Markets have interpreted statements from the Fed as signalling further easing of monetary policy. Reading its statements closely, however, this easing will only come if the economy deteriorates further. That is a realistic possibility, but we reckon that there is ‘only’ a 40% chance of further easing."

DenDanske Weekly Focus 20100903

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