Market movers today
Today, we get only second tier data (manufacturing and industrial production data from France will be watched), so market focus is set to be on developments around the G7 meeting, which starts in Canada today and runs until tomorrow.
In addition, after yesterday's tones from Prime Minister Theresa May on backing down and including a time limit to the backstop option, further developments on UK Brexit talks will be followed even more closely as the backstop option is another point of disagreement with the EU.
We published our ECB and FOMC previews ahead of next week's meetings. For the ECB, we expect only a formal change to forward guidance in July, while we expect the Fed to take its next step towards the neutral rate by another 25bp hike (see FOMC Preview - A step closer to neutral , 8 June, and ECB Preview - End of QE approaching but no formal announcement just yet , 8 June).
We also published FX Strategy - EUR/USD lower for longer - but not forever , 8 June . We opt to revise down our forecast profile for EUR/USD and now see the cross at 1.17 in 1M, 1.17 in 3M (previously 1.19), 1.20 in 6M (1.23) and 1.25 in 12M (1.28).
As in 2010 and 2014, we have run Danske Bank's World Cup Model to predict the outcome of the upcoming World Cup in Russia. We predict Brazil will win and Denmark and Sweden will reach the round of 16. Read more about this and our updated outlook for the Russian economy in World Cup 2018 Special - Forecasting the Russian economy and 2018 World Cup , 8 June.
To read the entire report Please click on the pdf File Below: