US durable goods orders where focus will be on core orders

Market movers today

• The main data release today is US durable goods orders where focus will be on core orders. The series is quite volatile and although core orders were weaker than expected in April, it has jumped higher in recent months and suggests a rebound in US capex in Q2 after a weak Q1. The recent upward trend is set to continue in May, thus giving more confidence of a broad-based recovery going into H2 (see more below).

• Also in the US the third release of GDP growth in Q1 is due and we expect a downward revision to -1.8% q/q from -1.0% q/q. Our expectation of a downward revision follows as health care spending should be revised sharply lower.

• ECB’s Weidmann speaks today. He is considered very hawkish but recently has sounded slightly more balanced about monetary policy and has not been able to change market sentiment. Ahead of the EU summit on Friday, he is likely to continue to communicate a need for strengthening fiscal rules.

• Today at 09:00 CET, we will publish our quarterly Nordic Outlook including our new forecasts on the Nordic countries.

Selected market news

Yesterday the positive newsflow about the economic situation in the US continued. Data confirmed that housing is recovering and consumers are gaining strength. The latter also gave more signs that wage growth may soon pick up. This appears as the consumer confidence report shows that ‘jobs plentiful versus hard to get’ – which tends to lead wage growth – continues to rise.

The stronger economic data initially sent US stocks higher but they ended the day lower as concerns about the violence in Iraq returned. This followed after at least 50 people were killed after a second consecutive day of Syrian airstrikes in Western Iraq. The risk-off sentiment has also weighed on Asian stocks, which are mostly lower this morning.

In France the far right National Front has failed to form an official group in the EU parliament. This implies the party will not get the opportunity to take key positions in parliamentary committees while it will also lose speaking time. Instead the UK Independence Party formed an anti-establishment coalition but it rejected an alliance with the National Front as it was seen as anti-Semitic.