Market movers today
A quiet day on the data front. Preliminary US Michigan consumer confidence for April is the most interesting item.
ECB President Mario Draghi is speaking in Florence today at 15:15 CEST. We expect the speech to have little market impact.
The Danish market is closed today due to the bank holiday but Danish CPI inflation data for April is still due out today.
Selected market news
US President Donald Trump continues to mould the international nuclear scene. He announced that a summit will be held on 12 June in Singapore. He will discuss North Korean denuclearisation with the country’s premier Kim Jong-un.
A populist government in Italy is increasingly likely as the Five Star Movement and League parties move closer to forming a coalition government, as talks are said to have made significant strides. Peripheral spreads widened, but not dramatically.
US inflation came in below expectations yesterday. CPI core grew by just 0.1% m/m in April against expectations of 0.2%, implying an unchanged core inflation rate of 2.1% y/y. This supports our view that the Fed is not about to accelerate its hiking cycle but will stick to twothree more hikes this year depending on data, in line with the latest ‘dots’ and market pricing.
In the UK, the Bank of England stayed on hold (vote count 7-2) as expected, but signalled that the hiking cycle has not been cancelled but postponed. We stick to our call that the BoE is going to hike once in the second half of 2018 and once more in 2019. See Bank of England review: Keeping the hiking cycle alive but timing is data dependent, 10 May.
