Market movers today
We have a very busy week ahead, but today not much is on the agenda. In the Scandi space, we will get Norwegian and Danish CPI inflat ion data for May this morning.
Tomorrow, US President Trump is due to meet North Kore a’s Kim Jong-un in Singapore (1:00 CEST). Also, the UK House of Commons is set to vote on 15 House of Lords’ amendments to the EU withdrawal bill, which is likely to create some political tension.
On Wednesday, we have the FOMC meeting, where the Fed is expected to hike again, see FOMC Preview: A step closer to neutral, 8 June. On Thursday, we do not expect the ECB to change its forward guidance, but we may see some hawkish parts, see ECB preview: End of QE approaching but no formal announcement just yet, 8 June as well as our audio briefing ahead of the ECB meeting.
On Friday, the US administration is releasing its full list of products imported from China, which are hit by Trump’s 25% tariff.
Selected market news
The highlight of the weekend was the G7 meeting. At first , all G7 leader seemed to endorse a common communique. After comments GDP from Canada’s P rime Minister Just in Trudeau at a press conference, where he said that Canada would impose tariffs on US imported goods on 1 July, US President Trump withdrew his support from the common statement. Further, Trump lashed out against the EU for unfair trade partnership. Later, White House economic advisor Larry Kudlow referred to Trudeau’s comment s as ‘st abbing us in the back’ and ‘a bet rayal’. Trump also suggested on Twitter that the US will look at tariffs on the automobile industry. This will be met with concerns in e.g. Germany, which has a big car exporting industry.
On Friday, the media reported that the Italian government may introduce a flat tax system over a three-year period. The first phase would be for the corporate sector in 2019, low income families in 2020 and wealthier families in 2021. Over the weekend, Italian finance minister Giovanni Tria gave his first interview after taking office. He said that an exit from the euro was not under discussion, that It aly’s debt /GDP rat io must cont inue t o decline and t hat It aly must priorit ise st ructural reforms over deficit spending. The statements were welcomed by Brussels and posi tive for markets. Tria also said that the 2019 budget will be prepared following a continual dialogue with the EU. The tested Italian bond market should find support today.
The Swiss referendum on Vollgeld was turned down by 75.7% of voters, according to the polls. Vollgeld was a proposal that the SNB should not be the only authority over money supply.
On Brexit , Michel Barnier said on Friday that a solution to the Irish border is needed by the autumn, somewhat later than the original deadline EU set at June. That may indicate that the EU summit by the end of this month is only about the backstop and not border/customs/trade for Brexit topics. The most important decisions are all to be made at the October summit.
