Focus turns to Nordic Retail Sales

In focus today

This morning, we receive retail sales data for April from both Denmark and Norway at 08.00 CET. We expect Norwegian retail sales to come in at 0.5% m/m seasonally adjusted although uncertainty with respect to the Easter impact is very high.

In Sweden we get foreign trade data for April at 08.00 CET. We expect it to show improvement, in line with the subindex of export orders in the manufacturing PMI as well as the Business Sweden's Export manager's index, both of which have been increasing in recent months. At 09.00 CET, there is an open hearing of the Riksbank's Executive Board and external evaluators by the Riksdag Committee on Finance. Riksbank governor Thedéen will be available for media comments after the event.

Markets in the US and UK are back after yesterday's bank holiday.

From the US we receive the Conference Board consumer confidence figures for May at 16.00 CET.

ECB's Knot speaks at 15:45 CET. Fed's Kashkari (not a voting member) speaks at 15.55 CET, and Fed's Cook (voting member) speaks at 19.05 CET.

Economic and market news

What happened over night

In Japan, finance minister Shunichi Suzuki was quoted saying he was concerned about the negative impact on the Japanese economy from a weak Yen. Suzuki put emphasis on how the weak currency made imported goods more expensive which again could pose difficulties to the government's goal of securing above inflation wage increases. This morning the yen is trading at around 156.67 against the dollar (USDJPY).

Asian equity markets are mixed this morning with Australia and Japan in the red, whereas Hong Kong and South Korea are slightly up. Shanghai is trading flat this morning.

US futures for the three major indices, the Dow Jones, Nasdaq and the S&P500, are all up this morning.

Oil is again slightly up this morning with Brent trading around USD83.30/bbl after yesterday having gained 0.9%.

What happened yesterday

In the euro area, ECB chief economist, Philip Lane, and chief of the French central bank, François Villeroy, went on record reaffirming the ECB's intention to commence its first cut to interest rates next week, 6 June. As the decision to cut is already widely expected amongst market participants focus is on the outlook beyond 6 June.

Villeroy did not rule out another rate cut in July, yet the governing council should not commit to it already now but preferred to wait and see, as keeping the freedom in terms of timing and pace was important. Lane was more balanced, as he said if interest rates were to be kept too restrictive for too long it might force the ECB to adapt below-neutral rates down the line. However, Lane was also quoted saying the 6 June rate cut was 'not a declaration of victory' [over inflation], and that policy makers would need to keep rates restrictive this year, to ensure inflation would keep easing towards the ECB's target.

In Germany, Ifo figures were unchanged for May from the revised April print, with the composite business climate indicator remaining at 89.3. The Ifo thus reported more subdued results compared to last week's PMIs which rose from their April levels and came in above expectations. However, the crucial expectations component rose to 90.4, the highest level since mid-2023, thus indicating further recovery in the horizon.

In Norway, LFS-unemployment figures stood at 4.0% in April slightly up from 3.9% in March as employment growth stalls and the labour force rises moderately.