Danske Daily – 13 October 2017

New research from Danske BankMarket movers today

Key market movers today will be CPI inflation and retail sales in the US. We estimate CPI core increased 0.2% m/m (1.8% y/y against 1.7% y/y in August), which is a bit more than the trend seen over the past half year. We expect headline CPI to come out at 0.6% m/m (2.3% y/y against 1.9% y/y in August) driven by a sharp rise in gasoline prices related to the hurricanes Harvey and Irma. If our estimates turn out right, then both CPI and CPI core will be close to/above the 2% target, but note that the Fed targets PCE inflation (still significantly below target) and hence it is still struggling with low inflation.

With respect to the US retail sales control group, we expect to see some reversal of the August decline of 0.2% m/m and look for a rise of 0.4% m/m. We also have US consumer sentiment from University of Michigan (preliminary) and a couple of Fed speeches by Evans (voter, dovish) and Kaplan (voter, dovish).

Note that a speech on monetary policy by Fed chair candidate Jerome H. Powell scheduled for today has been cancelled.

In Europe focus continues to be on the situation in Catalonia and Brexit negotiations.

Selected market news Yours faithfully

Danske Bank

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