Market movers today

In the US , we get a range of data releases to keep an eye on today in light of the increased uncertainty over the macro outlook, notably industrial production and retail sales for May . In addition, the first estimate of consumer confidence from the University of Michigan for June is due out.

In Europe, it is quiet on the data front and markets will stay tuned to the political headlines ahead of next week’s EU summit and the ECB’s Sintra Forum.

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In the Scandi markets, today’s big event will be the Swedish May inflation figures (see next page).

The Bank of Russia (CBR) will announce its decision on the key rate and the central bank governor will hold a press conference. Together with Bloomberg and Reuters consensus, we expect a 25bp cut to 7.50% as the central bank has stated its confidence about decelerating inflation, and external conditions (lack of new anti-Russian sanctions by the US) are not shaking up the RUB .

Selected market news

Stocks in the Asian session traded miscellaneously on Friday morning, while the bond rally intensified on trade war concerns putting the brakes on global economic growth and new geopolitical tensions in the Persian Gulf region after the tanker incident. The Trump administration accused Iran of the attacks on the tankers while Iranian officials denied they were behind the incident.

US Secretary of State Michael Pompeo said on Thursday in Washington that Iran had threatened earlier to restrain oil transport in the Strait of Hormuz. While Pompeo gave no evidence and did not take any questions from reporters, Trump administration officials said that at least one of the ships was attacked by mines. They showed a picture of a tanker with a hole caused by a mine that had exploded and an undetonated mine inside.

The US has sent a guided missile destroyer to the Gulf of Oman to join another US destroyer stationed near a damaged tanker. While the Pentagon stated that Iranian small boats were identified in the area, the US Central Command said “a war with Iran is not in our strategic interest, nor in the best interest of the international community”.

Brent soared by almost one US dollar per barrel after Pompeo’s statement, but quickly deflated, trading around 61.5 USD/bbl on Friday morning, which means a 3.7% surge from yesterday’s lows.

In the UK, Boris Johnson led the race to become the country’s next prime minister in a secret ballot of Tory MPs. Foreign Secretary Jeremy Hunt came second, gaining less than half of votes versus those for Johnson. The next round of voting is next Tuesday.

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