Sweden: Trade war risk is increasing

Danske Research Team Danske Bank A/S

Market Movers ahead

The next scheduled date for the trade disputes is 30 June, where the US government is set to announce plans for restricting Chinese investments.
The European Council meeting on 28-29 June will be important for whether the German government crisis is resolved, what line the new Italian government takes and possibly for the Brexit process.
We expect the June inflation number for the euro area to be 2%, up from 1.9%, but it is likely to decline again later this year.
The most important US inflation measure is likely to have increased in May.
Swedish data is likely to show another trade deficit in May.

Global macro and market themes

A further escalation in trade tensions has become our baseline scenario ahead of 6 July.
The escalation will weigh on global economic growth.
Equity volatility will be high, with downside risks for equities near term.
Industrial and agricultural commodities are primarily at risk.
The prospects of a stronger USD, lower commodity prices and weaker global growth weigh on emerging markets.

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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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