Fra Danske Bank:
Asger Wilhelm Dalsjö, [email protected] , Assistant Analyst
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In the euro area, focus turns to the November unemployment data. The unemployment rate has led steady at 6.4% in the previous six releases showing a labour market in balance, following a large revision to earlier data that we got in September. We expect the unemployment rate remained at 6.4% in November.
In Sweden, inflation data for December is released today. In November, inflation showed an unexpected decline, as core prices fell by -0.6% m/m, bringing the yearly rate to 2.4%. For December we expect a seasonally normal rise in inflation. Core inflation in December is expected to land at 0.6% m/m, bringing the year-on-year change to 2.6%. Energy prices have been low because of the mild winter weather, resulting in CPIF to be largely unchanged at 2.3%.
Economic calendar
In the US, President Trump said that he is taking steps to ban Wall Street firms from buying single-family homes to address affordability concerns and reduce housing costs. The move targets private-equity landlords like Blackstone and American Homes 4 Rent, which have been criticised for contributing to reduced housing supply and rent inflation. Homebuilder stocks dropped sharply, with American Homes 4 Rent hitting a three-year low, falling 4%, and Blackstone shares down 5.6%.
On a busy evening, President Trump also announced measures to block dividends and share buybacks for defence contractors until they accelerate production and improve cost efficiency. Defence shares fell sharply, with Lockheed Martin dropping 4.8%, Northrop Grumman falling 5.5%, and General Dynamics sliding 3.6%. The executive order further proposes capping executive pay and tying future contracts to production targets.
Furthermore, President Trump announced plans to withdraw from 35 non-UN groups and 31 UN entities, including the UN Framework Convention on Climate Change and UN Women, citing conflicts with US interests and inefficiency. The move aligns with Trump’s broader scepticism of multilateral institutions, raising concerns about the US losing influence on global issues like climate change and gender equality.
In geopolitics, tensions over Greenland have escalated as President Trump revived ambitions to take control of the Arctic island, citing its strategic importance for US defence and mineral resources. European allies, led by Denmark, are coordinating a response, reaffirming Greenland’s autonomy amid concerns over potential unilateral US action. NATO is set to address the issue at its next meeting, while Denmark has disputed Trump’s claims of Russian and Chinese presence near Greenland. Overnight, US Secretary of State Marco Rubio announced plans to meet Danish leaders next week but gave no indication of retreating from Trump’s ambitions.
Furthermore, crude oil prices initially fell after President Trump announced plans to release up to 50 million barrels of Venezuelan crude stuck under blockade. However, they recovered much of the losses overnight. This follows the seizure of a Russian-flagged tanker linked to Venezuela and signals Trump’s ambition to control oil flows in the Americas while reviving Venezuela’s oil sector. The move has sparked condemnation from China and Russia.
In the US, mixed signals emerged from key labour market and activity data. The ISM Services index rose more than expected in December to 54.4 (from 52.6), driven by new orders and employment components. However, the series has been volatile recently and opposing signals from other PMI surveys suggest caution in interpreting the data. Meanwhile, the ADP employment report showed private-sector jobs increasing by 41k in December, close to consensus (47k).
The JOLTs survey highlighted a notable decline in job openings to 7.1 million (from 7.4 million), with the ratio of job openings to unemployed falling to 0.91, its weakest level since March 2021. While this supports the Fed’s case for rate cuts amid cooling labour market conditions, the number of involuntary layoffs remains low, suggesting a stable ‘low hiring, low firing’ environment. Overall, the mixed data package leans dovish, reflecting labour market risks that the Fed continues to monitor closely.
In the euro area, HICP inflation fell to 2.0% y/y in December (cons: 2.0%, prior: 2.1%), while core inflation declined to 2.3% y/y (cons: 2.4%, prior: 2.4%), below expectations due to weak goods inflation. Headline inflation softened primarily due to lower energy prices, though services inflation remained sticky at 3.4%. The weaker-than-expected data has supported lower market pricing for inflation in Q1 2026 and raised expectations of potential ECB rate cuts, with the markets now pricing in 5bp of cuts from the ECB by July. However, with growth still holding up, services inflation being sticky, and as inflation expectations are anchored, we do think the bar for new rate cuts from the ECB is high.
Additionally, the December euroCOIN indicator from Bank of Italy pointed towards strong growth in Q4 2025, with 0.5% q/q GDP growth compared to the consensus and ECB projection of 0.2% q/q. The indicator has historically had a decent correlation with actual GDP growth, although not perfect.
In Australia, November’s monthly inflation landed below expectations at 3.4% year-on-year, while core inflation momentum remained steady at 0.3% month-on-month. With full monthly inflation readings only recently introduced, the Reserve Bank of Australia is likely to continue prioritising quarterly prints, leaving markets pricing a 50% chance of a rate hike in Q1.
In Sweden , the composite PMI declined to 56.3 in December from 57.9 in November, driven by a fall in Services PMI to 56.7. The decrease was primarily due to lower business volumes and delivery times, which had previously supported November’s strong reading.
In China, authorities have reportedly asked tech firms to suspend orders for Nvidia’s H200 chips as Beijing considers mandating domestic AI chip purchases. This reflects ongoing tensions over semiconductor trade amid US export controls and China’s efforts to reduce reliance on US-designed chips. The H200 is the predecessor to Nvidia’s current flagship chip. Nvidia CEO Jensen Huang said this week that demand in China for its H200 chip was strong and the company is viewing purchase orders as a signal of approval rather than expecting any formal announcement from Beijing.
Equities : Global equities pulled back yesterday after a strong start to the year. The sell-off was relatively broad-based, and it was difficult to pinpoint a single, clear driver behind the move. That said, there were a few notable cross-currents. In Europe, cyclicals once again outperformed defensives, even on a down day for equities overall. Small caps continued to outperform, reinforcing the message that leadership remains broader than last year’s narrow rally. Energy stocks underperformed as oil prices fell a further 2% on the day. In the US yesterday, Dow -0.9%, S&P 500 -0.3%, Nasdaq +0.2%, and Russell 2000 -0.3%. This morning, the negative tone is continuing in Asia, with most markets lower. Futures point to a softer open in both Europe and the US.
FI and FX: The USD was on the rise yesterday when it was outshined only by the SEK. The stronger USD looked to be coupled with a setback in stock markets after a strong first couple of days and a rally in US Treasuries with the 10Y yield falling to 4.13% and EUR/USD ending below 1.17. Weak risk sentiment also hit the oil market and consequently NOK which reversed course after the rally to start the year. DKK continued to be under pressure prompting a sharp rise in EUR/DKK FX forwards as the market speculating in potential FX intervention from the central bank.
See also our in-depth FI and FX morning comment *
Executive Briefing – Volatile politics, steady economies , 7 January
Flash Comment Denmark – Greenland has only limited impact of the Danish economy , 7 January
Reading the Markets Norway. Norges Bank to sell NOK3bn in NGB 1.75% 09/29 and NGB 3.75% 06/35 , 5 January
Riksbank Minutes , 30 December
The Editorial – It’s not a sin to be optimistic , 28 December
European Government Bond Rating Calendar and Outlook for 2026 , 22 December
Report completed: 8 January 2026, 07:00 CEST
Report first disseminated: 8 January 2026, 07:30 CEST
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