Central Bank Decisions and US Jobs Report Take the Spotlight this Week
Danske Bank says markets will be driven this week by central bank decisions and the US jobs report. ECB survey releases, RBA (likely +25bp), Norges Bank (expected +25bp) and a steady Riksbank decision are key policy events. Geopolitical tensions in the Middle East — and higher oil/gas prices (US petrol ~USD 4.45/gal, ~+50% since the conflict began) — are lifting inflationary pressure, pushing bond yields higher (US 2y +10bp, 10y +7bp) and weighing on FX. Equities have risen alongside yields on strong earnings, while EURUSD is trading above 1.17 and USDJPY has tightened toward the 156 area amid suspected JPY intervention. Danmarks Nationalbank’s FX reserve report (after EUR/DKK hit 7.4735) and Sentix/PMI data will also influence euro-area outlook. Overall, the note flags mixed market drivers: upside risk to inflation/yields from energy but upside to equities from earnings — creating both risks and opportunities for FX and fixed income.