DENMARK: Exit Polls Show Frederiksen’s Social Democrats With Most Votes: TV2
Exit polls published by Danish broadcaster TV2 point to Prime Minister Mette Frederiksen’s Social Democrats winning the biggest share of the vote (21%) and number of seats (37) of any party in Tuesday's election. But that is not a surprise - and as expected it leaves Frederiksen in need of other parties' support to form a governing coalition. TV2 currently estimates the seat count in the Danish parliament (Folketing) will be: Red bloc 86, Blue bloc 75, Moderates 14. (The unicameral Danish parliament (the Folketing) has 179 members, with 175 representing Danish constituencies, two for the Faroe Islands, and two for Greenland.) With 90 seats required for a majority, that would potentially put the centrist Moderates in a "kingmaker" position as negotiations get underway.
- More context here from our Danish election primer (link):
- "the large number of parties contesting the vote, and the various political blocs that could be formed after the election will likely mean a lengthy coalition formation period after results come through overnight. The ‘traditional’ division would be between a left-leaning ‘Red bloc’ led by the Social Democrats and a right-leaning ‘Blue bloc’ under the centre-right Venstre. However, the government of the past four years has included both of these erstwhile adversaries, alongside former PM Lars Lokke Rasmussen’s centrist Moderates (who have also experienced an upswing in support, with Rasmussen’s role as foreign minister putting him in a prominent position during the Greenland furore). As such, a reformation of a centrist coalition branching across the usual left-right divide could prove another option."
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EURUSD: Bear Cycle Still In Play
- RES 4: 1.2081 High Jan 27 and key resistance
- RES 3: 1.2007 76.4% retracement of the Jan 27 - Feb 6 bear leg
- RES 2: 1.1961 61.8% retracement of the Jan 27 - Feb 6 bear leg
- RES 1: 1.1857/1929 High Feb 18 / 10
- PRICE: 1.1783 @ 19:12 GMT Feb 20
- SUP 1: 1.1742 Low Feb 19
- SUP 2: 1.1693 76.4% retracement of the Jan 19 - 27 bull leg
- SUP 3: 1.1670 Low Jan 22
- SUP 4: 1.1573 Low Jan 19 and a key support
A bear cycle in EURUSD remains intact and last week’s sell-off reinforces current conditions. The pair breached support at 1.1805, the Feb 17 low, on Thursday to cancel the reversal candle pattern last Tuesday. Thursday’s extension resulted in a break of 1.1766, the Feb 6 low. The clear breach of this level signals scope for a deeper retracement. This has opened 1.1693, a Fibonacci retracement. Key S/T resistance is 1.1929, the Feb 10 high.
US PREVIEW: Chicago PMI, Delayed January PPI Highlight Upcoming Docket
Below is a summary of next week's major scheduled macro/Fed events:
| Date | ET | Impact | Event |
| 23-Feb | 1000 | ** | Factory New Orders |
| 23-Feb | 1030 | ** | Dallas Fed manufacturing survey |
| 24-Feb | 800 | Chicago Fed's Austan Goolsbee | |
| 24-Feb | 830 | ** | Philadelphia Fed Nonmanufacturing Index |
| 24-Feb | 855 | ** | Redbook Retail Sales Index |
| 24-Feb | 900 | ** | FHFA Home Price Index |
| 24-Feb | 900 | ** | FHFA Quarterly Price Index |
| 24-Feb | 900 | Atlanta Fed's Raphael Bostic | |
| 24-Feb | 1000 | ** | Wholesale Trade |
| 24-Feb | 1000 | *** | Conference Board Consumer Confidence |
| 24-Feb | 1000 | ** | Richmond Fed Survey |
| 24-Feb | 1030 | ** | Dallas Fed Services Survey |
| 25-Feb | 700 | ** | MBA Weekly Applications Index |
| 25-Feb | 935 | Richmond Fed's Tom Barkin | |
| 25-Feb | 1320 | St. Louis Fed's Alberto Musalem | |
| 26-Feb | 830 | *** | Jobless Claims |
| 27-Feb | 830 | *** | PPI |
| 27-Feb | 942 | *** | MNI Chicago PMI |
MACRO ANALYSIS: MNI US Macro Weekly: IEEPA's Dead, But Tariffs Will Live On
Our US weekly macro publication can be found here.
- Friday’s announcement of the US Supreme Court decision to strike down the White House’s International Emergency Economic Powers Act (IEEPA) tariffs overshadowed the week’s data and Fed developments.
- Even if the court’s decision wasn’t entirely shocking (prediction markets indicated only a 25% probability that the court would uphold the tariffs), it left open questions over whether and when tariff refunds will be paid, and potential impacts on existing trade deals negotiated under the auspices of IEEPA.
- One thing that does seem clear is that the sudden drop in tariff rates will be reversed at least partially, muting the longer-run macro impact. The administration was quick to announce a global 10% tariff via Section 122 authority with Section 232 and 301 tariffs to remain and be expanded over time. Treasury Secretary Bessent said that this approach would result in “virtually unchanged tariff revenue in 2026”.
- Elsewhere, real GDP surprised much lower than expected at 1.4% annualized (cons 2.8) in the Q4 advance release after 4.4% in Q3, although the government sector weighed heavily owing to the shutdown and a very strong deflator. Private demand metrics were close to expectations with PDFP at 2.35%.
- Core PCE inflation was in line with unrounded expectations in the delayed December report at 0.355% M/M whilst it ended the year at 3.0% Y/Y (highest since Apr 2024). Core goods inflation accelerated to 2.0% Y/Y (highest since May 2023) whilst supercore PCE inflation at 3.3% Y/Y saw zero disinflationary progress compared to the 3.3% averaged across 2025.
- Second tier data saw some sizeable strength with core durable goods accelerating in a positive sign of business investment and with industrial production growth regaining traction and broadening out.
- Labor data saw some sequential improvements as well, with weekly ADP rising an average 10.25k per week for its fastest since late November and initial jobless claims surprised notably lower.
- Business sentiment indicators were more mixed however, including the flash PMIs for February slipping with the manufacturing index at a seven-month low and services at a ten-month low. It came against a backdrop of strong input and selling cost inflation.
- The December trade deficit surprised higher on a pullback in gold net exports. Tech-led capital goods imports continue to surge but are offset by consumer and industrial goods in tariff front-running payback.
- The FOMC minutes had a hawkish addition with “several” members wanted to keep open the possibility that the next Fed rate move could be a hike, not necessarily a cut.
- Gov. Miran meanwhile pared back his rate cut view, seeing a need for 100bp vs 150bp of cuts this year.
- Near-term, last week’s NFP-driven hawkish shift has extended further this week, with just 15bp of cuts priced for the June FOMC. There is however still a cumulative 56bp of cuts to year-end and terminal yields are at still the dovish end of recent ranges.
