In focus today
Today will be light on the macro front, but in Denmark, focus turns to the release of the retail trade index for March at 8:00 CET. According to our own Spending Monitor, retail spending decreased 2.5% y/y in real terms in March compared to the same month last year. However, this fall was driven by the seasonal effect of Easter falling in March last year and April this year. Adjusted for seasonality, real spending increased 1.8% m/m in March, and we expect the consumption figures today to reflect this increase.
In Sweden, we will receive PPI data for March from Statistics Sweden at 8:00 CET. The PPI and price plans from the NIER survey (released on Tuesday) will play a crucial role in shaping inflation expectations, which will influence the Riksbank’s ability to implement further rate cuts.
For the remainder of the week, we will receive a lengthy list of key data releases. Among the most important, we look out for PMI data from China and US Q1 GDP, due for release on Wednesday. On Thursday, we keep an eye on the monetary policy meeting at the Bank of Japan, while Friday’s releases include both euro area April flash HICP and the US April Jobs Report.
Economic and market news
What happened Friday and over the weekend
In the US, the University of Michigan consumer sentiment was revised higher to 52.2 in April 2025 from a preliminary reading of 50.8. Despite the upward revision, consumer sentiment fell for a fourth consecutive month to the lowest level since July 2022, as consumers perceived risks to multiple aspects of the economy, in large part due to the ongoing uncertainty around trade policy and the potential for a resurgence of inflation looming ahead. Year-ahead inflation expectations jumped to 6.5% due to tariff announcements, though this figure was revised slightly down from 6.7% in the preliminary release.
In Japan, Tokyo April inflation (excl. fresh food) rose to 3.4%, beating consensus and indicating sustained and broadening price pressures. As stated by Governor Ueda, BoJ will continue to raise rates if inflation converges towards 2%-target (until now, it has been largely driven by food). However, he also noted how the trade war might decrease the likelihood of durable inflation. We have pushed our two expected rate hikes further down the road, with one in the autumn and another in the first quarter of 2026.
In China, industrial profits expanded by 0.8% y/y in the first three months of 2025, recovering from a 0.3% drop in the first two months of the year, amid further stimulus measures from Beijing. Additionally, private sector profits fell by 0.3%, a much softer drop than the 9.0% plunge in the prior period.
In the US-China trade war, conflicting messages emerged from members of Trump’s cabinet regarding the ongoing trade negotiations with China over tariffs. Although President Trump claimed discussions were taking place and that he had spoken with Chinese President Xi Jinping, Beijing denied any such talks. Treasury Secretary Scott Bessent mentioned interactions with Chinese officials during IMF meetings but said he did not discuss tariffs. Meanwhile, Agriculture Secretary Brooke Rollins asserted that daily conversations with China about tariffs were occurring.
In geopolitics, Trump and Zelenskiy met one-on-one on Saturday, as many prominent state leaders travelled to Rome for the funeral of Pope Francis. The meeting, described as “very productive,” marked their first encounter since a tense Oval Office meeting in February. After the meeting, Trump criticised Russian President Vladimir Putin’s recent missile attacks on civilian areas in Ukraine, suggesting that alternative strategies such as banking or secondary sanctions might be necessary. On Sunday, Trump once again urged Russia to stop attacks, while US Secretary of State Marco Rubio said the Trump administration might abandon its attempts to broker a deal if Russia and Ukraine do not make headway. Republican Senator Lindsay Graham stated that the US could consider secondary tariffs on anyone involved in selling Russian oil. The idea was already floated in early April, but thus far the Trump administration has kept its powder dry. More pressure has been put on Zelenskiy, instead of Putin.
On another note, Greenland and Denmark agreed on Sunday to strengthen ties in response to US interest in acquiring Greenland. Greenland’s PM Jens-Frederik Nielsen visited Denmark and met with Danish PM Mette Frederiksen to emphasise unity amid Trump’s annexation ambitions. Both leaders stressed that only Greenlanders can decide their territory’s future, rejecting US acquisition while seeking respectful partnership.
Equities: What a week in equities! S&P 500 rebounded by 5% last week and Nordic/European indexes by 3%. Cyclicals made a massive comeback, gaining >5% globally and thereby outperforming defensives by a huge margin. The turnaround in stocks even triggered a Zweig Breadth Thrust, which is a rare technical momentum indication of bull market. Friday was no different, with S&P 500 gaining 0.7% and Stoxx 600 0.4%. Investors are struggling for direction this morning though, with Asia unchanged and US futures dipping into negative.
FI & FX: Last week ended relatively quietly, with risk appetite holding up reasonably well, while US Treasury yields continued to decline. The 2Y US Treasury yield fell by 5bp, while both the 10Y and 30Y segments declined by 8bp. As a result, the US yield curve steepened modestly from the front end. In contrast, yields moved slightly higher in Europe, with the 2Y German government yield rising 3bp and the 10Y up 2bp, despite dovish comments from ECB’s Holzmann. In the FX space, EUR/USD consolidated within the 1.13-1.14 range, as the USD sell-off took a breather, supported by positive headlines on US-China de-escalation and a more measured tone from the Trump administration regarding Fed independence. Overall, moves in G10 FX were modest – CHF and JPY weakened against the USD amid the improving risk environment. This week, focus turns to inflation, GDP and labour market data from the euro area and the USD, while the Bank of Japan is set to maintain its monetary policy stance unchanged on Thursday, while the Fed entered its blackout period on Saturday. This week, a flurry of global data will shape the macro narrative alongside trade-related headlines.
