In focus today
From the US, both JOLTs labour turnover report for March as well as the Conference Board’s April consumer confidence survey are due for release. The job openings data from the former is a key labour demand indicator for the Fed. The still stable number of daily job postings suggests that the level has likely remained relatively steady despite the tariff uncertainty.
In the euro area, focus turns to the Spanish inflation data for April, which we receive ahead of the euro area print on Friday. On Friday, we expect euro area HICP inflation to tick down to 2.1% y/y in April from 2.2% y/y in March.
Also in the euro area, we keep an eye on data on credit growth and business confidence indicators. The business confidence indicators cover the month of April, so they will likely reflect the impact of the US tariffs, which will be interesting to follow.
In China, we will receive manufacturing PMIs from both NBS as well as Caixin (private version) overnight. In line with consensus, we expect to see a decline in both indexes as effects from the trade war feeds through. The Emerging Industries PMI for April was released last week and showed a big drop from 59.6 to 49.4.
In Sweden, a bunch of interesting macro data is being released today. At 08.00 CET we will receive data on retail sales and household lending (both March), but the full GDP indicator for Q1 will also hit the wires. As the GDP indicator is notoriously volatile, we prefer NIER’s Economic Tendency Indicator when it comes to forecasting Swedish growth, and we are lucky enough to see the April ETI released today at 09.00 CET. A continued decline in the ETI could well suggest a potential slowdown in GDP growth and is worth watching. Furthermore, the broader survey will provide valuable insights into households and firms’ economic outlook, including firms’ price plans.
In Norway, retail sales figures will be published today, but these are for March and will capture neither effects from the global turmoil nor the signals of less rate cuts sent by Norges Bank at its meeting in March. We still believe that retail sales growth slowed to 0.1% m/m in March, but the timing of Easter always makes the figures for March and April a bit uncertain.
Economic and market news
What happened overnight
In the Canadian election, Canadian PM Mark Carney’s Liberals retained power. At the time of writing, parliamentary majority hangs in the balance, with the Liberals not yet having won enough seats to form a majority government. Trump’s tariffs and annexation threats boosted Carney’s patriotic support despite Conservative efforts focusing on cost of living and crime. Carney ran Canada’s central bank during the 2008 financial crisis, and the Bank of England during Brexit, claiming he can use this experience as preparation for handling the economic turmoil caused by Trump. The result marked a recovery for the Liberals who were on track to lose power until the resignation of former PM Justin Trudeau helped consolidate left-of-centre votes.
What happened yesterday
In Denmark, retail sales in March surprised to the downside, coming in at 0.1% lower than in February (SA), mainly due to a 0.8% drop in sales of food and other everyday commodities. Clothing sales increased by 2.7%, while other consumer goods remained unchanged. Overall, retail sales in the first quarter of 2025 were 0.7% higher than in the fourth quarter of 2024.
In Sweden, the producer price index declined in March (-3,0% m/m and -0,3% y/y), marking a decrease for two consecutive months and supporting lower inflation expectations. This is good news for the Riksbank, and we will receive more information today with the release of the tendency indicator from NIER, which contains firms’ pricing plans.
In Norway, the unemployment rate increased from 3.8 % to 4.4 % in March. These figures are volatile on a monthly basis, illustrated by the fact that the trend adjusted data was unchanged at 4.1%. And as always, we prefer the more updated unemployment data from the NAV, where we saw no weakness in March, and April figures are due on Friday.
In geopolitics, Russian President Vladimir Putin announced a three-day ceasefire from 8-10 May to commemorate the 80th anniversary of World War Two victory, inviting international leaders, including Xi Jinping, to celebrations. Ukraine criticised the truce, demanding immediate action and a lasting ceasefire, stating that a ceasefire should be “real, not just for a parade.” In response to Putin’s statement, the White House welcomed efforts to pause the conflict but emphasised that President Trump seeks a permanent ceasefire, not a temporary one, between Russia and Ukraine. Thus far, Russia has repeatedly violated the ceasefires it has imposed.
Equities: It was about time we had a dull session in equities! US equities were close to unchanged yesterday (with some intraday volatility). Europe outperformed, with Stoxx 600 up 0.5%. This was not a “buy the dip” session (needless to say, as most of the dip is gone). Investors did, however, take notice of the lower bond yields, sending yield-sensitive defensives higher (real estate, utilities, healthcare). It was not all hunky-dory: VIX broke the downward trajectory and stalled around 25. Perhaps VIX will not drop below 20 until we have more clarity on tariffs. If so, positioning support from risk parity funds will have to wait.
FI & FX: It was a relatively quiet start to the week, with US Treasury yields continuing to drift lower, following the trend from last week. The 2Y US Treasury yield declined by 6bp, the 10Y yield fell by 3bp, and the 30Y yield was down by 2bp, resulting in a modest steepening of the US yield curve. In contrast, yields in Europe were slightly firmer, with both 2Y and 10Y German government bond yields rising by 1bp. EUR/USD remains stable in the 1.13-1.14 range. Early this morning, Canada’s Liberal Party secured a fourth consecutive term, with Carney elected Prime Minister, as widely expected. In the near term, we expect USD/CAD to tick down to 1.37, given stretched short CAD positioning. NOK FX did remarkably well during the latter part of yesterday’s session.
