German fiscal spending amongst market movers today – Danske Bank

Danske Bank analysts point out that today the German Bundestag will start debating the 2020 budget and will be a key event for markets.

Key Quotes

“With the advent of the constitutional ‘debt brake’, the scope for additional fiscal spending in Germany has been significantly limited to some extra EUR5bn (0.14% of GDP) in 2020. In that light we will look out for any signs of a softening of the government’s stance on Germany’s strict fiscal rules or headlines about the creation of a “shadow budget” to boost public investments and ‘green initiatives’.”

“We also get July industrial production figures out of France and Italy. The German ones brought nothing to cheer last week, so focus will be whether the Italian and French ones can defy the German downtrend. France in particular, has been one of the rays of light lately in the Eurozone, with manufacturing confidence actually recovering some ground in Q2.”

“In Sweden we expect CPIF and CPIF excluding energy to print a tenth below the Riksbank’s new forecasts, while Danish CPI figures for August should also show a slight increase to 0.5%.It’s a crucial session for Norwegian markets today with the release of both inflation and the Regional Network Survey. In short we expect both releases to support the case for a Norges Bank rate hike next week. In comparison markets only price a roughly 50% probability of this hike materialising.”