In focus today
For Sweden, we note the production and consumption data for June, where the figures are expected to show improvement. According to the preliminary GDP estimate for the second quarter, activity picked up in June, which today’s figures should confirm. However, this does not change the outlook of weaker indicators heading into the autumn and is rather a correction following the weak figures in May.
Otherwise, the week wraps up with a quiet day for data releases.
Economic and market news
What happened overnight
In the US, Trump has nominated Stephen Miran for a temporary position on the Federal Reserve Board to serve until 31 January 2026, filling the remaining term of a recently vacated seat. Miran has expressed scepticism about the Fed’s independence and has argued for stronger presidential control over Fed Board. Known as a dove and a proponent of a weaker USD, his nomination led to a slight decline in the USD, as markets anticipate his potential alignment with Trump’s push for looser monetary policy.
What happened yesterday
The Bank of England cut the Bank Rate by 25bp to 4.00% as widely expected. The vote split delivered a hawkish surprise, with five members supporting a cut and four voting for an unchanged decision. Additionally, the statement adopted a hawkish tone, noting that the monetary policy stance has become less restrictive and that any future cuts will depend on the outlook for further disinflation. Markets reacted with a modest rise in Gilt yields and a decline in EUR/GBP below the 0.87 mark.
In Sweden, CPIF excluding energy came in at 3.15% in July, just below the 3.2% market consensus. However, core inflation remains 0.3 p.p. above the Riksbank’s target, with the broader CPIF measure exceeding the June forecast by 0.5 p.p. A positive development is the narrowing gap between actual core inflation and the Riksbank’s forecast narrowing from 0.4% in June to 0.3% in July. While the outcome is relatively neutral compared to expectations, a cut by the Riksbank at the 20 August meeting is highly unlikely. Inflation details are due on 14 August.
Equities: Equities edged higher again yesterday, with notable regional divergence as European markets once more led the advance alongside emerging markets, while US indices ended marginally lower. Sector performance offered little in the way of a clear signal, though cyclicals marginally outperformed defensives. Healthcare remained under pressure – less so in the Nordic region – but weighed down by US company-specific headlines. In the US yesterday, Dow -0.5%, S&P 500 -0.1%, Nasdaq +0.4% and Russell 2000 -0.3%. In Asia this morning, the picture is mixed: most markets are in the red, with Japan the clear outperformer, partly on the back of relative “trade-war-position”. Futures are pointing higher again in both Europe and the US.
FI and FX: Risk sentiment improved in the European session yesterday with cyclicals pushing equity indices higher. The mood was much more neutral in the US session, where the S&P 500 closed marginally lower. Bonds saw some headwinds through the session as a hawkish BoE and a weak 30Y UST auction added upward pressure on yields. However, market volatility in fixed income market remained muted with very little news to trade on. The USD found some support during the US session before news broke that Trump intends to nominate Stephen Miran as a Federal Reserve Governor, triggering a USD sell-off. EUR/USD is unchanged at 1.166 since yesterday. The upward pressure on EUR/NOK -partly related to the drop in energy prices – continued with the cross now trading above the 11.9 mark.
