Market movers ahead
- In the US, the FOMC minutes from the May meeting may give more insight into what the members think about the timing of the next Fed hike and quantitative tightening. The week after, both PCE inflation and the jobs report for May are due for release.
- In the euro area, focus is on whether the PMI figures and ifo expectations will follow the weakness observed in the US and Chinese PMIs. May inflation figures are also due to be released.
- In the UK, focus remains on politics ahead of the general election on 8 June.
- In Scandinavia, there are a number of data releases including GDP growth figures for Q1 in Denmark and Sweden, Danish FX reserves and the Norwegian oil investment survey.
- OPEC meets on Thursday to decide on an extension of oil supply cuts. We expect cuts to be extended by six to nine months.
Global macro and market themes
- Volatility in markets is set to increase as the cycle turns lower.
- The USD's fall and EUR's strength is as expected given the divergence in economic performance. We remain medium-term EUR/USD bullish.
- We expect fixed income markets to range-trade with a possible slight bullish bias near term on the lower cycle and falling inflation expectations.
- We have turned near-term bearish on equities, as we are in the interim period between two reflation periods.