My 5 cents on the asset swap spreads tightening * Stop-loss has driven the most recent leg tighter. * We see little appetite to go against the tightening with big event risks ahead. * ASW are still more likely to be wider next year. corporate.nordea.com/article/95978/…

🇩🇪 With VW turmoil in the news, the labor market is back in the spotlight. Employment has been revised, we now have a steady declining trend since May. v/u ratio also drifts lower. Positive consumption growth in Q3 is nice, but it may prove unsustainable if more jobs are lost

What a difference a week makes 20bp fewer cuts priced through Dec next year

H/t John Authers Another way of expressing rising US term premia

Core services momentum too high again after some relief in September. Our note on today's print: corporate.nordea.com/article/95985/…

So much for the concerningly weak PMI composite employment index... ... the unemployment rate was revised down and is at a record-low of 6.3% in Sep!

German ASW tightening continues...

🇺🇸 Trump tariffs will strengthen the US dollar Many critics say tariffs will put upward pressure on inflation and downward pressure on real economic growth, but that did not actually happen in the trade war against China, when Trump increased the effective tariff rate by about

While the ECB is debating if inflation victory is in sight or already here, markets have taken a clear stance. This is the yoy-curve for EUR inflation swaps, ie read as implied forward inflation rates on Friday vs 6 months ago.

More 2025-cuts are being priced in. At this time last year, rates dropped like a rock as almost 100bp of rate cuts were added to the pricing for this year. Chart showing cumulative ECB pricing for the years 2024 and 2025.

🇺🇸 Everyone thinks the economy will stay strong Looking ahead, the consensus expectation is that the economy will stay strong, which means that the bar for a positive surprise next year is high. This is an important change compared to the start of this year, when investors

🇨🇭 The Swiss National Bank cut rates by 50bp to 0.50% - the fourth cut in this cycle, but the first jumbo cut - while keeping an easing bias. "Underlying inflationary pressure has decreased again", justifying the move. Can the SNB avoid a return to negative rates next year?

Call Lagarde dovish if you want, but just as in the past press conferences, there is hardly any guidance on coming policy rate changes. The ECB remains data dependent! The president only tells us the ECBs reaction function to allow us to assess the importance of incoming data.

🇪🇺 As the ECB gets ready to shift to full (passive) QT in January, the breakdown of the PEPP will be published on a monthly basis (instead of bi-monthly). For the first time in 10 years, the ECB won't be buying any bonds under either the APP or the PEPP. ecb.europa.eu/press/govcdec/…

Markets flirting with pricing less than 100bp of ECB policy rate cuts in 2025.

Tune in to our latest Nordea Markets Insights DK podcast with Helge J. Pedersen and Anders Svendsen here (in Danish). 👉 nordea.com/da/nyhed/mens-… #Økonomi #Nordea #Podcast

ECB press conference with no news and then the news follow in “sources”-stories within hours? Considering the sensitivity of the discussions, this is not the way!

"A calculator app? Anyone could make that." Not true. A calculator should show you the result of the mathematical expression you entered. That's much, much harder than it sounds. What I'm about to tell you is the greatest calculator app development story ever told.

Tune in to our latest Nordea Markets Insights DK podcast with Helge J. Pedersen, Philip Maldia Madsen and Anders Svendsen here (in Danish). 👉 nordea.com/da/nyhed/trump… #Økonomi #Nordea #Podcast

Ending inflation…for Europe H/t CalvionAg