Sweden: Euro debt concerns return

Danske Research Team Danske Bank A/S

Market movers ahead

We expect the US PMI to fall back in May, while the euro area PMI should stabilise after the recent month's weakness.
We do not expect the minutes from either the Fed (Wednesday) or ECB (Thursday) to change the market's perception of the monetary policy stance in the US and euro area.
In the UK, we expect inflation to moderate further amid the fading impact of the GBP depreciation.
Further details on the formation of the new Italian government between the League and Five Star movement will be a key market focus for EUR fixed income markets.
Keep an eye on the unemployment numbers from Sweden and Norway, where the Swedish numbers might well be the lowest since May 2008.

Global macro and market themes

Breakthrough in Italian politics but worrying coalition formations have spooked financial markets and Brussels.
Further EUR weakening in the near term, but stronger in the medium term.
Substantial deepening of EMU is not looming.

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Danske Research Team

Danske Bank A/S

Research is part of Danske Bank Markets and operate as Danske Bank's research department. The department monitors financial markets and economic trends of relevance to Danske Bank Markets and its clients.

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