5 things we watch: IFO, US rates, Earnings revisions, USD & Gasoline
We start off this week’s 5 Things We Watch by having a look at the Ifo survey coming up this Friday in the midst of the Schwarze Null ruling. This is followed by talking about US rates and Nvidia earnings and we then move on to talking about the USD while lastly finishing off with gasoline demand
This week we are watching out for the following 5 topics within Global macro:
1) IFO data this Friday!
A troubled country that would undoubtedly benefit from less geopolitical tension and more accommodative energy market conditions is Germany which is currently in a crisis of its own making.
Chancellor Olaf Scholz’s government is challenged by the Constitutional Court’s ruling from last week on special fund financing outside the regular budget. The Finance Ministry in Berlin has frozen most new spending for the year, impacting all federal ministries except parliament and the Constitutional Court. If the ruling expands, Finance Minister Christian Lindner may need to account for over €30 billion in the revised 2023 federal budget, potentially jeopardizing his plan to reinstate constitutional borrowing limits, a key Free Democratic party policy. The court ruling has also delayed finalizing next year’s federal budget by budget lawmakers.
With IFO numbers coming out this Friday and with the deadline last week we anticipate that the recent developments will impact the survey and thus don’t give much weight to it.
Chart 1: Answers to the IFO survey before Wednesday will likely be positive
It’s Wednesday and that means time for another 5 things we watch where we hone in on the things that we have been most interested in over the last week.