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Fear of a slump

- Market Movers ahead
• "US Senior Loan Officer survey with details on credit conditions and demand for loans will be released on Monday. Local business surveys are expected to show some strengthening while housing starts and building permits are expected to fall."
• "The Euro area is facing a calm week in terms of macro data. ZEW expectations are likely to decline as market sentiment has turned more sour."
• "In Asia focus turns to Japanese GDP data for Q2. Consensus is for 0.6% q/q GDP growth but we see some downside risk to that forecast. USD/JPY has declined to a new low and speculation is rising over potential intervention from the Bank of Japan."
• "In Scandinavia attention will be on Norwegian Q2 GDP figures. We expect moderate growth."
- Global Update
• "Financial markets have become increasingly concerned about the risk of a slump with long-lasting repercussions. Data has turned softer in both Asia and the US."
• "The Fed decided to bring its exit to a halt and as a result we have postponed our expectations for a first Fed hike until Q4 11."
• "Euro area growth was strong in Q2, pulled up by Germany. Declining industrial production in June has raised concerns about growth in Europe too."
• "European government bond spreads widened. On Thursday the ECB was seen purchasing government bonds in the market and spreads began to narrow."
- Focus
• "Wheat prices have rallied since early July. We assess the fundamental situation in the grains market and conclude that the recent rally is overdone and that a global food crisis is not imminent. In an alternative ‘agflation’ scenario, the impact on inflation is notable – in particular in emerging markets."

DenDanske Weekly Focus 20100813

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