- Market movers: A busy week ahead "Several important economic releases are on the agenda for next week. On Monday we are due to get data on July‟s PMIs for the entire EMEA region. Overall, we expect the PMIs to drop slightly compared with last month‟s figures. On Tuesday we are scheduled to receive numbers on Turkish inflation in July. We expect the numbers to show that Turkish inflation has eased slightly. On Wednesday there is a rate decision in Romania. We expect the central bank to keep rates unchanged. This is also the case for the Czech rate decision on Thursday."
- Fixed income outlook: Keep an eye on Turkish inflation "On Wednesday next week we get data on Turkish inflation. This figure will reveal if the dovish stance from the Turkish central bank (TCMB) is justifiable or not. We expect inflation to have dropped to 8.3% y/y in July, down from 8.4% y/y in June. Hence, this reading should give TCMB – and maybe also the market – some confidence that inflation is no longer accelerating up."
- FX outlook: Will macro momentum continue to fall? "According to the signals from our EMEA FX Scorecard the macro sub-scores have trended down in recent weeks. This is an indication that the macro momentum in the EMEA region is losing steam and that the currencies therefore can no longer find much support in accelerating growth. Next week we are due to receive data on PMIs in the entire region, but also data on industrial production and retail sales in some countries. It will be quite interesting to follow these releases as they will give a clear indication as to whether macro momentum in the EMEA region will continue down."
- Scorecard-based trade of the week Buy CZK/ZAR "For a third week in a row trade Scorecard based trade of the week is CZK/ZAR and the Czech koruna is still the highest scoring currency in our EMEA FX Scorecard and the rand is the lowest scoring currency in the Scorecard. Over the past couple of weeks this cross has been remarkably stable, but the trend remains upward, with CZK continuing to outperform ZAR over the past week."
DenDanske EMEA Weekly 20100730
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