As sentiment turns sour, we look for hard data to match
|Market movers ahead
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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.
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We also look forward to hearing more from multiple FOMC members.
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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.
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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.
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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.
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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
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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.
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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.
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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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