Market movers ahead
Next week will be fairly slow in terms of US data and we should get a better sense of how resilient the US economy is to the global slowdown the following week, with ISM manufacturing and the May jobs report coming out.
We also look forward to hearing more from multiple FOMC members.
Results from this week's European Parliament election should ensure overall pro-EU sentiment in the Parliament but the political centre could be more fragmented.
Brexit has returned to the spotlight, with GBP falling and the likelihood of a negative scenario increasing and a leadership contest in the Conservative party coming up.
The setback in the trade war is set to take its toll on Chinese PMI and, rather than a recovery, we now expect it to move sideways at a quite low level in coming months.
In Sweden, we expect data do deteriorate, with weak GDP figures and manufacturing confidence declining. In contrast, in Norway and Denmark, we expect data - including GDP figures - to hold up well.
Weekly wrap-up
PMI releases cast doubt on the outlook for the global economy and, notably, the decline in US services PMI was troubling, given the strength of the US labour market.
While the global central banks have not reacted yet to the weakening sentiment, they may be forced to reconsider their stance and markets are pricing Fed cuts.
Weak economic releases and renewed Brexit uncertainty have hit risk sentiment badly. The stock market has declined and US yields fell sharply.
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