Fra Danske Bank:
Sofie Liv Petry, [email protected] , Assistant Analyst
For mobile users we recommend the web-version * including the FI and FX morning comment
*Restricted access – only for professional investors and investors domiciled in and a resident of an EEA member state.
From the US, the minutes from the September FOMC meeting will be released tonight. We will look for signs of the FOMC being more divided than the unanimous decision to hike rates by 25bp suggested.
In Sweden, preliminary inflation figures are in focus today. We expect CPIF inflation to rise clearly from 0.7% y/y to 1.6% y/y, at the upper end of a narrow consensus range, mainly driven by higher energy prices. Core inflation is also expected to pick up across both goods and services, though more modestly, to 0.75% y/y from 0.5% y/y last month. Temporary tax effects remain significant.
The Norwegian government will publish its 2027 fiscal budget. We expect the budget indicator to point to a slightly expansionary budget plan of around 0.1% of GDP, but please note that this proposal will also need to secure a majority in parliament.
In Poland, the National Bank of Poland will announce its rate decision. We expect the policy rate to remain unchanged at 3.75%.
Economic calendar
On Russia, President Trump said he would speak with Russian President Putin “very soon” after the death of a laboratory worker from a suspected case of pneumonic plague in Siberia. Both the US and China are cooperating with Russia as health concerns intensify. The CDC has stressed that circumstances remain unconfirmed but noted that pneumonic plague can be spread between people through respiratory droplets.
In France, both Le Pen, who is leading current polls, and Bardella, from National Rally, pledged to tighten public finances. Le Pen proposed a “golden rule” to cap debt at 60% of GDP and reduce the deficit by 0.5pp each year towards a near-balanced budget, with the rule to be put to voters in a referendum. She also outlined a EUR 140bn package of spending cuts and tax increases over a five-year horizon, aiming to bring the deficit below 3% of GDP by 2032. The party is targeting an even larger deficit reduction than the government in next year’s budget, increasing the prospect of fiscal tightening in 2027. However, the targets look highly ambitious and implementation remains uncertain, especially given the party’s criticism of the current budget and its refusal to rule out bringing down the government. Still, the commitment to fiscal consolidation was clear and gave some relief to markets.
In commodities, Brent crude briefly declined below USD 100/bbl yesterday, dipping to around USD 98/bbl, but has since rebounded to around USD 101/bbl as persistent risks to Middle East energy flows overshadowed signs of rising supply from the region. According to Reuters , exports from the region increased to around 19m bpd in September, up by 4m bpd compared to August and roughly three quarters of pre-war levels, with Saudi Arabia driving most of the rebound. At the same time, Iran’s exports fell to zero due to the US blockade. Crude flows recovered more strongly than refined products.
In the US, ADP’s average weekly private employment increased by 23,750 over the four weeks ending 19 September, pointing to a further improvement in private sector job growth. This marked the strongest increase since early June.
Equities: Equities continued its rebound yesterday, with both the S&P 500 and Nasdaq reaching fresh record highs, gaining 0.5-0.6% respectively. Unlike earlier this week, yesterday’s session had a clear relief-rally character. Some of the weakest-performing sectors in recent months led the market higher, with utilities, real estate, and consumer discretionary up between 1% and 3% on the day.
New all-time highs may seem inconsistent with the renewed escalation in the Middle East, sticky high oil prices, rallying bond yields and central banks’ increasingly tightening. However, it is worth remembering that the S&P 500 has already shed roughly a fifth off its valuation multiple over the past year. Only over the last quarter, S&P 500 has become 5% cheaper, even after the recent rebound.
For that reason, we disagree with the view that equity markets are excessively optimistic. In our view, markets have priced the current earnings backdrop fairly conservatively throughout this year. The fact that equities, credit markets, and bonds have reacted differently in recent weeks does not necessarily mean that one asset class is right and another is wrong. Rather, they represent different things. For equities, the dominant driver is future nominal earnings growth. The energy shock is visible, more so in certain sectors than others, and higher rates are restraining parts of the market. Nevertheless, earnings remain the key determinant of broad equity performance, provided that returns on investment continue to grow faster than the discount rate, which, so far, is the case.
FI and FX: The pressure is on the long end of the US Treasury curve given not only supply of Treasuries but also from the hyperscalers. We do see the risk of 10Y and 30Y Treasuries hitting 6% as investors demand a higher premium for the long end. In Europe, France is gradually recovering as Le Pen is also looking for fiscal tightening and that there will be a budget for 2027 where the deficit is no higher than 5%.
This is also supportive for the euro, that yesterday moved towards the 1.126 level. This morning it has moved back towards the 1.123 level. The oil price rose to USD 101 as Iran tries to block the flow out of the strait of Hormuz.
See also our in-depth FI and FX morning comment *
Reading the Markets USD – French debt concerns keep EUR/USD under pressure , 6 October
Executive Briefing – Global growth rising amid new European debt stress , 5 October
France: From Aaa to A+, but not another Euro debt crisis , 5 October
Weekly focus – French budget sets off turmoil in European bonds , 2 October
Reading the Markets Sweden , 2 October
Report completed: 7 October 2026, 07:00 CEST
Report first disseminated: 7 October 2026, 07:30 CEST
Disclosures/disclaimer
*For a definition of ‘Professional Investors’ under MiFID II (Market in Financial Instruments Directive 2014/65), go to the FAQ. To change your disclaimer settings, go to ‘Research Disclaimer’ at the footer of research.danskebank.com.
Hurtige nyheder er stadig i beta-fasen, og fejl kan derfor forekomme.
