The EU is also set to discuss additional measures

Market movers today

Late today the EU is set to publish a list of new names of individuals and organisations affected by sanctions due to the Ukraine-Russia conflict. The EU is also set to discuss additional measures.
June’s M3 money supply is scheduled for release. We expect an increase of 1.30% y/y – slightly higher than consensus.
We forecast a small drop in the German IFO index for July. We could be in for a positive surprise though, following the better-than-expected PMI released yesterday.
In the government bond market Belgium is up for a S&P review today. S&P has Belgium on stable outlook and the ‘AA’ rating is still one notch higher than Moody’s. We expect no changes from S&P today.

Selected market news

Yesterday the Norwegian security service revealed that Norway could be threatened by an imminent terror attack from Syrian Islamists.

The EU will add 15 individuals and 18 entities, half of which are companies, to the list of individuals and organisations affected by sanctions due to the conflict between Ukraine and Russia. The list will not be public until late Friday. It is also working on additional sanctions, which would fall in the so-called ‘phase-3’ category, which targets specific economic sectors. Apparently, the EU is set to target state-owned Russian banks and restrict their access to capital markets. It will continue to discuss new measures today.

Core inflation in Japan increased slightly in June to 2.3% y/y from 2.2% y/y in May – we had expected a slightly higher figure. Inflation in Japan is currently held up by the sales tax hike earlier in the year.

Following the recent banking crisis, Bulgaria’s parliament has approved the resignation of Prime Minister Oresharski and his cabinet. President Plevneliev is expected to appoint a caretaker government in early August to govern until the general elections on 5 October.

Scandi markets

Interesting key figures due for release in Sweden today. (1) Weakness abroad weighs on Swedish exports but thanks to the US, Germany and the UK export growth is actually up y/y in 2014. Since imports have grown faster, arguably driven by strong domestic demand, net exports have been contributing negatively to real GDP so far this year. We expect the soft May reading (essentially flat) to be followed by a better June but the surplus may not exceed SEK4bn, which is needed in order to be GDP positive. (2) Domestic demand including private consumption and retail sales have been key drivers for Swedish growth. Retail sales exploded in March and April (up between 5 and 6.5% y/y), whereas May was more normal at 3% y/y, partly blamed on bad weather. We expect June to be like May and predict something close to 2.5%. (3) Finally we get household lending data, where we see a steady up-trend. All figures are due for release at 09:30.

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