According to analysts at Danske Bank, market focus remains on the probability of forthcoming central bank easing with most prominently rates markets re-adjusting the probability mass between a 25bp (Danske’s eventual call) and a 50bp FOMC rate cut at the end of the month.
“Today, our eyes will primarily be on Sweden and the Riksbank minutes set for release at 09:30 CEST. As the decision to leave the repo rate path was unanimous, it will be interesting to see how the board has interpreted and processed recent dovish signals from ECB and Fed.”
“In the euro area, we get a further piece of the puzzle on where GDP growth will arrive in Q2 with the industrial production data for May . The April figures pointed to a weak start for the industrial sector into Q2 and country figures already released paint a mixed picture for May. We still think that the industrial sector will likely have returned as an outright drag on growth in Q2.”
“We also get Chinese trade data for June. Although volatile on a monthly basis, markets will scrutinise these data for indications of the state of Chinese and global demand ahead of the trade truce reached at the end of June.”
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