Market Movers ahead
In the US, we have a heavy calendar next week with many important data releases. Most importantly, the labour market report for May is due out on Friday, which might be pivotal to the markets pricing of a potential summer hike from the Fed. We estimate non-farm payrolls increased by 160,000 in May. Moreover, we estimate that the unemployment rate declined to 4.9% and that average hourly earnings increased by 0.2% m/m, implying a wage inflation rate of 2.5% y/y.
In the euro area, the main focus will be the ECB meeting on Thursday. We expect the ECB to maintain its patient stance as broad financing conditions have improved following the easing measures announced in March.
In the UK, the PMIs for May might attract some attention and will tell us whether April's dive to three-year lows across sectors was temporary or whether the economy is actually slowing further in Q2 ahead of the referendum, possibly due to Brexit uncertainties.
In Scandinavia, focus will be on Q1 GDP figures from Sweden and Denmark, while both the labour market report and retail sales data from Norway will be watched closely as well. Moreover, we would also keep an eye on the Danish foreign currency reserves data due out on 2 June, as the latest daily net position data points to currency intervention of some DKK10bn in May.
Global macro and market themes
US consumption and housing gain pace giving comfort to the Fed.
A summer hike is increasingly likely barring any negative surprises.
The USD is set to strengthen short term driven by higher US yields.
Euro yields are supported by QE - set to stay range bound.
Moderate improvement in German sentiment indicators.
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