Next report will be published on 3rd of August
Market movers ahead
The Italian government seems to have successfully broken German resistance to more far-reaching policy responses to solve the euro crisis – but this match is not over yet.
The ECB would gravely disappoint markets and analysts alike if it failed to cut its repo rate in the coming week. Whether the ECB will also lower the deposit rate or announce other types of monetary easing is more uncertain.
We expect the ISM and jobs data for the US to signal a continued slowdown and hence perhaps another round of monetary easing from the Federal Reserve.
The Danish and perhaps also the Swedish central banks seem set to cut policy rates but Sweden is a close call.
The EU summit delivered more than expected, with bank recapitalisation, a Spanish aid package that will not weaken the relative position of private investors and EU leaders promising to do what is necessary to ensure financial stability.
The European crisis seems to have fed through to US consumer confidence but the US housing market is recovering.
Japan has decided to double its consumption tax in a significant move to secure sustainable government finances.
Swedish data looked strong at first glance but hid signs of slowing demand.