– Asian equities and FX rally
– Q3 GDP likely contracted in Switzerland and Sweden, revised higher in the US
– Italy to sell 5yr, 10yr bonds today
What to watch for today
SEK: Q3 recession? Our economists forecast Q3 Swedish GDP to fall 0.2%qoq, the first negative quarter since Q4 2011. The weakness should be broad based. Consumer and business confidence have deteriorated to levels consistent with poor household spending and corporate investments. On top of what we expect to be a subdued domestic demand performance last quarter, net exports are also likely to subtract from growth. Data in line with our expectation should be supportive of further policy easing by the Riksbank over the winter, especially if combined with weak survey data. While the positive surprise in the German PMI and Ifo last week bodes well for Sweden, the level of the PMI remains consistent with further Riksbank easing.
Click here to read the full report: FX Daily
Credit Suisse