Market movers today
Today is a quiet day in terms of economic data releases. In the UK, the labour market report for March is due. Weestimate the unemployment rate (3M average) was unchanged, as there is still no evidence that Brexit uncertainties and slower growth have hit the labour market. Weestimate the annual growth rate in average weekly earnings ex bonuses (3M average) fell from 2.2% to 2.1%, meaning that nominal wage growth continues to be subdued despite higher inflation.
The euro area final HICP figures for April are due out . The details should be especially interesting for April, as they should reveal to what extent Easter drove the inflation figure up.
The Polish cent ral bank is expected to keep the policy rate unchanged at 1.50%.
There are no market movers in Scandi today.
Selected market news
US President Donald Trump faced a new headwind on Tuesday after a source said Trump had asked former FBI Direct or James Comey to end the agency’s investigation into ties between former White House national security adviser Michael Flynn and Russia. The growing concerns over US politics weighed on equity markets overnight with the S&P futures down around 0.5% overnight . The USD has also weakened and EUR/USD moved above 1.11 for the first time since November 2016 prior to the election. Following market concerns over European politics for some time, the worry seems to be moving in the direction of US politics. The decline in risk appet ite has pushed US bond yields a bit lower in Asian trading hours.
Oil prices retreated yesterday, breaking the rising trend over the past week. Brent crude oil fell USD1 per barrel on weaker risk sentiment and US data showing an increase in US crude stockpiles.
Data for US manufacturing production for April surprised on the upside yesterday, rising 1.0% m/m versus consensus of 0.4% m/m. Hence, hard data is catching a bit up with the stronger soft data seen in Q1. However, regional business surveys and ISM continue to show some weakening of the US cycle in the months ahead.
In Sweden, the Riksbank has proposed changes to the inflation framework to target the previous policy variable CP IF (still 2% target ) and introduce a ‘variation band’ of +/-1%. The change should have no implicat ions for monetary policy though (see Riksbank Comment: Much ado about nothing, 16 May 2017).
