According to analyst at Nordea Markets, whether or not US will impose auto tariffs or not will be a question that will overshadow everything else over the next days.
“Trump is facing internal resistance against such a move within the Republican party, but it is not as if Trump is scared of using executive orders. And after all the Trump camp and the Bernie Sanders camp within the Democrats are odd bedfellows on several issues stemming from MMT-like spending to international trade. The soft deadline on the matter is 18 May.”
“In Europe, we need to follow the signals from the big-spender Matteo Salvini, who is clearly gearing up for the upcoming European Parliamentary elections.”
“Another month, another bad print for the Euro area PMI (Thursday). Both our Swedish leading indicator and our market-based model point at another weak print next week. Both for manufacturing and the composite PMI.”
“US durable goods orders (Friday) will be interesting in the US since Chinese imports usually lead the developments by up to a quarter. The jury is hence still out on whether the yuuuge drop in Chinese imports will spill over to a material setback in US durable goods orders.”
“Lastly, FOMC talk will be important next week, as one shouldn’t forget that the setback in S&P500 started already with Powells presser 1st of May (before Trumps tweeting). Powell speaks late Monday evening (CET) and he will be given the chance to feed the doves after Trumps re-escalation of trade tensions.”
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