Danske Research Team
Danske Bank A/S
Market movers today
Today, we have a lot of interesting things on the agenda. A key focus point in the market is the tense situation between the US and China over Hong Kong. Today, US President Trump will hold a press conference about US measures in the form of sanctions against Chinese officials who are dealing with Hong Kong. More forceful measures, such as applying the same trade rules to Hong Kong as mainland China, may be considered down the road.
In the Nordics, we get Q1 GDP details from Denmark and Sweden and unemployment data for Denmark and Norway (April and May, respectively). Norway is set to unveil new fiscal stimulus measures. For more details see Scandi section overleaf.
In the euro area, the ECB's monetary statistics for April and preliminary HICP inflation in May are due out at 11:00 CEST.
We will also keep an eye on the April monthly private consumption data from France.
In the US, monthly real private consumption for April is due out at 14:30 CEST, which is likely to show another significant decline. However, to some extent it is old news and more high-frequency data based on transaction card spending has shown a gradual improvement in May, see US Macro Monitor: Early signs the bleeding is stopping but the wound has not healed, 26 May.
Selected market news
After a strong rally over the past weeks, ignoring the tensions building between China and the US over Hong Kong, market anxiety started creeping in in the US session and overnight in Asia ahead of President Trump's press conference later today. He is set to outline the administration's response to the decision by China to tighten the grip on Hong Kong. Yesterday, China's National People's Congress passed the anti-sedition law, which will allow China to extend many of its security practices to Hong Kong. On Wednesday, this law prompted Secretary of State Mike Pompeo to declare that Hong Kong was no longer to be seen as autonomous from China. This opens up for actions from Trump and the US administration, which could mean imposing sanctions against foreigners who undermine "fundamental freedoms" and autonomy in Hong Kong or go as far as revoking Hong Kong's favoured status. The question is how far Trump will go at today's press conference, as removing Hong Kong's favoured status would probably spark negative market developments, hitting global risk sentiment, which could backfire on the US economy as it would further deteriorate the relationship with China. With US-China tensions running high, we continue to see risk to the upside for USD/CNY and USD/CNH.
In Europe, the EU Commission economic sentiment index yesterday rose only marginally to 67.5 from 64.9 in April, while services confidence continued to fall to -43.6 from -38.6. That said, the details were less bleak, as both demand and employment expectations recovered some ground in the services and retail sectors and production expectations also rose in industry/construction. However, order book levels eased further in a sign that a swift industry turnaround is not yet in sight, especially for car manufacturers. On the consumer side, households' expectations of their financial situation improved slightly.
This publication has been prepared by Danske Bank for information purposes only. It is not an offer or solicitation of any offer to purchase or sell any financial instrument. Whilst reasonable care has been taken to ensure that its contents are not untrue or misleading, no representation is made as to its accuracy or completeness and no liability is accepted for any loss arising from reliance on it. Danske Bank, its affiliates or staff, may perform services for, solicit business from, hold long or short positions in, or otherwise be interested in the investments (including derivatives), of any issuer mentioned herein. Danske Bank's research analysts are not permitted to invest in securities under coverage in their research sector.
This publication is not intended for private customers in the UK or any person in the US. Danske Bank A/S is regulated by the FSA for the conduct of designated investment business in the UK and is a member of the London Stock Exchange.
Copyright () Danske Bank A/S. All rights reserved. This publication is protected by copyright and may not be reproduced in whole or in part without permission.
Recommended Content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.