Sverre Holbek, CFA
Danske Bank A/S
Market movers today
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We have some quite important data releases in Scandinavia. In Norway, Norges Bank will publish the Q2 Regional survey (its preferred gauge of economic activity), which should paint a benign picture of the economy. In Sweden, we expect CPIF inflation fell to 1.7% in May from 2.0% in April.
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In Finland, focus is on the ongoing government crisis.
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In the UK, CPI inflat ion data for May is released and analysts are looking for an unchanged print at 2.7% y/y. Higher inflation is the main reason why real wage growth has turned negative, which has slowed the economy. However, focus these days is mainly on the political uncertainty, see also Research UK: May stays (for now) due to Brexit uncertainties published this morning.
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In Germany, we expect ZEW expectations rose slight ly to 21.1 from 20.6.
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In the US, NFIB small business opt imism for May is due out , and consensus expects it to remain basically unchanged but we think it may decline, as Trump is having a hard t ime delivering on his economic promises (tax reform and deregulation).
Selected market news
Government crisis in Finland. Yesterday, Finland's government collapsed after one of the three coalition parties, the Finns Party, elected a new leader Jussi Halla-aho over the weekend. Halla-aho is known for his strong anti-immigrat ion at t itude and on Monday, the two governing coalition partners of the Finns Party, the Cent re Party and the NCP, together announced that there is no common ground for cooperat ion effectively leading to a government collapse. At the time of writ ing, it is too early to say whether the government collapse will lead to a snap election or if a new government will be formed.
US Treasury takes steps to easen regulation on banks. The Trump administ ration released its first proposal yesterday to roll back the Obama-era Dodd-Frank Wall St reet Reform Act, including a reduct ion in the scope of the federal bank stability exams, reduced oversight of the large financial institutions, regulatory relief for smaller banks and a loosening of new mortgage restrictions.
US tech share slump continues, despite slight recovery. Tech shares were down 4% on Friday and cont inued to be the weakest performing S&P sector yesterday, declining 0.8%. There were also some signs of the sell-off spreading to other sectors, with the overall S&P index ending the day 0.1% lower. However, some recovery were seen towards the end of the day, with the shares of several chip makers turning higher.
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