Will Euro area credit growth show further slowing in July?

In focus today

In the euro area, we receive data on credit growth for July. Growth has picked up significantly this year in a sign of the easing monetary policy working though the economy. Yet, most recently credit growth has lost some momentum, and it will be interesting to see if that continued in July.

In Sweden, the NIER will publish the Economic Tendency Survey, which will be important assessing the outlook. The consumer confidence and the firm's price plans will be especially important. Additionally, we get the release of the Swedish trade balance results for July.

Overnight, in Japan, we get a badge of data including retail sales, unemployment data and Tokyo CPI inflation. Following the recent better-than-expected growth data for Q2 and some modest pick-up in private spending, July retail sales will be interesting to follow. Inflation remains a headwind for consumers with food prices as the key driver. Tokyo data will show if this trend continues.

Economic and market news

What happened overnight

In the equity space, Nvidia reported second-quarter revenue of USD 46.7bn, up 56% y/y, exceeding analysts' expectations. Additionally, its Q3 revenue projections and adjusted gross margins forecast were higher than expected. Despite the strong growth, Nvidia shares dipped around 3% in after-hours trading as investors reacted to the uncertainty over H20 chip sales to China, which were excluded from its financial guidance.

What happened yesterday

In Norway, the Labour Force Survey revealed a downward revision in the trend-unemployment from 4.8% to 4.6% for both June and July. While the headline appeared weak, the details highlighted strength, as the rise in unemployment this year has been driven by an expanding labour force, with employment also showing growth. We still prefer Friday's NAV registered labour market report as the primary signal for the state of the labour market, alongside other indicators.

On tariffs, the doubling of US duties on Indian imports of up to 50% took effect on Wednesday, straining US-India ties. The measures include a 25% punitive tariff linked to India's Russian oil purchases. India plans financial aid for affected exporters and aims to diversify trade to regions like China, Latin America, and the Middle East. Key goods like steel, aluminium, and passenger vehicles are exempt from the tariffs.

Equities: Equities were mixed, again, on Wednesday. US outperformed Europe, as has been the case the last four trading sessions. While European equities were little changed in another defensive session, S&P 500 hit a fresh record close, up 0.2%. But the miss came from the right reasons: China. Sales to China were basically halted during the quarter and guidance based on the assumption that China will remain off limits. Any resumptions from the administration will be pure upside from the current forecast and if not, this is a one-off and not a sign of a structural deceleration to growth. As a result, US futures are handling this report well, with futures only little lower this morning and Nvidia shares -3% in the aftermarket. European futures are little changed.

FI and FX: EUR/USD fell during the European trading session from 1.1645 to a low of 1.1574. During the US session, however, the move reversed with EUR/USD moving back towards the 1.1650 level. US yields also fell a few basis points during the US hours with 10y UST now at 4.23%. In Europe, peripheral spreads to Germany continued widening yesterday. For Scandi markets, NOK strengthened, aided by both higher energy prices and an underperformance in fixed income space. The SEK also strengthened yesterday, with EUR/SEK breaking through the downside in the previous 11.12-11.22 range touching the 11.08 level overnight.