Germany: Ifo Index and expectationsToday, the key indicator in the eurozone will be the publication of the German Ifo index, which investors are carefully comparing with yesterday's PMI data. Of particular interest is the component of expectations present in the Ifo and absent in the PMI, as it is able to better reflect the impact of trade conflicts, in particular, between the United States and China.USA: moderately positive signals and political noiseDespite weak regional reports from the Fed, the index of business activity in the US industry unexpectedly rose to 50.7, surpassing expectations of 49.1. At the same time, the services sector weakened to 51.4, but remained above the threshold of stagnation. The composite index decreased from 53.5 to 51.2, which still indicates moderate growth. The weakening of export orders in both sectors was offset by steady domestic demand: new orders increased in industry, while they decreased slightly in the service sector.However, against the background of macroeconomic statistics, the political factor has become more active again. There were reports that it was the ministers of finance and trade, Bessent and Latnik, who dissuaded the president from firing Fed Chairman Powell. Bessent also commented on the situation regarding trade negotiations with China, saying that a full-fledged agreement may take 2-3 years, and the resumption of dialogue is impossible without reducing tariffs, which now reach 145% on Chinese goods and 125% on American goods. The possibility of tariff cuts of up to 50% is being discussed on the sidelines, but the White House has not yet confirmed these rumors. This news caused cautious optimism and increased the probability of a deal with China to 38% from 34% previously.An additional boost to the market was given by information from the Financial Times, according to which the US administration may consider the possibility of partially exempting automakers from import duties after appropriate lobbying efforts by the industry.Eurozone: weakness in the service sectorThe combined eurozone business activity index fell to 50.1 in April, while the drop in the services sector to 49.7 was unexpected. On the contrary, the manufacturing PMI showed positive dynamics, exceeding forecasts and reaching 48.7. Despite this, pressure on the ECB towards additional easing remains, especially since the price components also indicate a weakening of the inflationary pressure. The employment rate in the service sector, however, remains positive at 50.8, which mitigates the negative effect of the decline in the overall index.The update of the ECB wage index also indicates a slowdown in wage growth in 2025, which strengthens the case for lower rates. According to current expectations, the deposit rate may be lowered to 1.5% by September 2025.UK: alarming signs of stagflationThe PMI figures for April in the UK turned out to be worse than expected across the board. The composite index fell to 48.2, signaling a reduction in business activity. The indices for services and production were 48.9 and 44.0, respectively. At the same time, there is an increase in both incoming and outgoing prices, and employment continues to decline. This combination indicates the risk of a stagflationary scenario, which significantly complicates the task of the Bank of England in terms of monetary policy.Energy market: uncertainty over OPEC+ quotasOil prices fell by 2% after reports that several OPEC+ countries called for an additional increase in production in June, similar to the decision taken in May. Kazakhstan, in turn, stated that it was not ready to compensate for the excess production of the previous period with cuts. Eight OPEC+ countries will meet on May 5 to discuss the future quota. Due to continued pressure on prices in the second quarter, the average Brent price is expected to be around $70 per barrel, with a subsequent recovery to $85 in the fourth quarter.Stock markets: rising amid political optimismBuyers prevailed on stock markets, despite contradictory macro data. Cyclical sectors led the way, both in the USA and in Europe. The market continues to live under the influence of paradoxes: rising bond yields, a strengthening dollar, and a simultaneous rally in risky assets. The profitable reports of the companies also added to the positive. Indices in the USA ended the day with growth: Dow +1,1%, S&P 500 +1,7%, Nasdaq +2,5%, Russell 2000 +1,5%. However, Asia has been showing a decline since this morning, and futures for the United States and Europe also point to a correction amid cooling political optimism.Bonds and the foreign exchange market: caution returnsWhile Finance Minister Bessant acknowledged the excesses of the current tariffs on Chinese goods, he emphasized the strategic task of redefining U.S. global economic relations. His speech cooled the euphoria of the markets: the yield on 10-year US Treasury bonds rebounded from daily lows and reached 4.39%, indicating an increase in expectations for inflation and interest ...
USA: awaiting reports on the labor market and consumer sentimentTwo important macroeconomic reports will be released in the United States today — the March JOLTs on hiring dynamics and the April consumer confidence index from the Conference Board. Job vacancy data is a key indicator of the state of labor demand for the Fed. Despite the uncertainty caused by the tariff policy, stable data on daily job advertisements suggest that demand remains at an acceptable level.The Eurozone: Spanish inflation and business activityOn European platforms, attention will be focused on the publication of inflation data in Spain for April. This release precedes the general report on inflation in the eurozone, which will be released on Friday. The HICP index is expected to slow growth from 2.2% to 2.1% in annual terms.Of additional interest are data on lending and business sentiment in the eurozone for April, which will be able to reflect the first effects of the new US tariffs.China: expectation of a decline in manufacturing activityIn Asia, the PMI indices for April from NBS and private Caixin will be published. According to expectations, both indicators will show a decline, confirming the negative impact of the ongoing trade war. The previously published Emerging Industries PMI dropped sharply from 59.6 to 49.4 points.Sweden: macroeconomic releases and growth prospectsSwedish statistics today are rich in publications. At 08:00 CET, reports on retail sales and consumer lending for March are expected. The GDP indicator for the first quarter will attract special attention, however, due to its volatility, analysts prefer the NIER economic sentiment index, which will be released at 09:00 CET. Its further decline may signal a slowdown in the Swedish economy.Norway: retail sales remain questionableRetail sales statistics for March will be published in Norway. Despite the global instability, it is unlikely to be reflected in these data. Sales growth is forecast to slow to 0.1% month-on-month, although the effect of postponing holidays makes it difficult to assess the real state of consumer activity.Economic and market news: key eventsCanadian Elections: liberal victoryIn the last parliamentary elections in Canada, the Liberal Party under the leadership of Mark Carney retained power. Although the results had not yet provided them with a full majority in parliament at the time of publication, the victory marks the restoration of the party's position after the resignation of Justin Trudeau. Carney relied on his reputation, formed during the crisis of 2008 and the Brexit process.Macroeconomic data from Denmark, Sweden and NorwayIn Denmark, retail sales in March unexpectedly decreased by 0.1% compared to February, mainly due to lower food costs. However, clothing sales increased by 2.7%.In Sweden, the producer price index decreased for the second month in a row (-3.0% mom, -0.3% YoY), which reduces inflation risks and supports the Riksbank's position.In Norway, the unemployment rate rose to 4.4% in March, but the adjusted data remained unchanged at 4.1%. More recent unemployment statistics will be published on Friday.Geopolitics: the Truce in UkraineRussian President Vladimir Putin announced a three-day truce from May 8-10 in honor of the anniversary of the end of World War II, inviting world leaders to events. Ukraine has criticized, insisting on the need for an immediate and full-fledged ceasefire. The White House supported the idea of a truce, but stressed that the goal should be a long-term peace initiative.Stock markets: stabilization and local successesThe trading session in the American markets passed without significant changes, while the European indices showed growth: the Stoxx 600 added 0.5%. Shares of companies in defensive sectors such as real estate, utilities and healthcare rose against the background of lower bond yields. The VIX volatility index has stabilized around 25 points, which may indicate prolonged uncertainty due to tariff policy.Debt and currency markets: declining yields in the United StatesAt the start of the week, US Treasury bonds continued to rise in price: the yield on 2-year securities decreased by 6 basis points, 10-year — by 3 bps, and 30-year— by 2 bps. European yields, on the contrary, rose slightly. The EUR/USD pair remained stable in the range of 1.13–1.14. The victory of the liberals in Canada led to a moderate strengthening of the Canadian dollar, and a further decline in the USD/CAD pair is expected to reach 1.37. The Norwegian krone also showed good results at the end of yesterday's ...
The beginning of the week promises to be relatively calm on the macroeconomic front. In Denmark, the retail trade index for March will be published today at 08:00 Central European time. According to its own expense monitor, real retail sales decreased by 2.5% year-on-year. However, the decrease is due to the calendar effect: Easter last year fell in March, and this year in April. Seasonally adjusted, real sales increased by 1.8% compared to February, and official statistics are expected to reflect this positive trend.In Sweden, the producer price index for March will be published at the same time. These data, as well as the results of the NIER price Expectations survey published earlier this week, will be important for shaping inflation expectations and, consequently, for further actions by the Riksbank regarding changes in interest rates.Main events of the weekDuring the week, investors' attention will be focused on a variety of key publications. On Wednesday, PMI data from China and a preliminary estimate of US GDP for the first quarter are expected. On Thursday, attention will turn to the Bank of Japan's monetary policy meeting. On Friday, preliminary data on inflation in the eurozone and the US employment report for April will be released.Friday and weekend eventsIn the United States, the University of Michigan consumer sentiment index for April was revised upward to 52.2 points from an initial 50.8. Despite the revision, the index continues to decline for the fourth month in a row and is at its lowest level since July 2022. Uncertainty in trade policy and fears of rising inflation remain the reason for the deterioration in sentiment. Inflation expectations for the year ahead jumped to 6.5%, due to recent tariff initiatives, although the preliminary estimate was even higher — 6.7%.In Japan, Tokyo inflation (excluding fresh produce) accelerated to 3.4% in April, exceeding forecasts. This confirms the existence of stable inflationary pressures. The head of the Bank of Japan, Ueda, confirmed that further rate increases are possible if inflation approaches the target level of 2%. However, he noted that a trade war could weaken inflationary trends. Following this, we expect one of the two planned rate increases to be postponed to the fall and another to the first quarter of 2026.In China, industrial profits increased by 0.8% year-on-year in the first three months of 2025, which is a recovery from the recession at the beginning of the year. At the same time, private sector profits decreased by only 0.3%, which is significantly better than the previous drop of 9%.The US-China Trade War: conflicting signalsDespite President Trump's statements about the ongoing negotiations with Chinese President Xi Jinping, Beijing has denied the fact of such negotiations. The US Treasury Secretary announced cooperation with Chinese representatives at the IMF meetings, but without discussing tariff issues. The Minister of Agriculture, in turn, noted the daily contacts on the topic of tariffs.Geopolitics: the meeting between Trump and ZelenskyIn Rome, as part of the funeral of Pope Francis, the first meeting between Donald Trump and Vladimir Zelensky took place since February. The negotiations were described as "very productive." Trump condemned Russia's recent attacks on civilian facilities in Ukraine and stressed the need to find alternative methods of pressure, including secondary sanctions. At the same time, US Secretary of State Marco Rubio announced the possible curtailment of peace initiatives if Russia and Ukraine do not show progress in negotiations.Greenland and Denmark strengthen their allianceAmid renewed U.S. interest in acquiring Greenland, autonomy's Prime Minister Jens-Frederik Nielsen visited Copenhagen. The meeting with Danish Prime Minister Mette Frederiksen ended with a joint statement of unity: the fate of the island will be decided solely by the Greenlanders.Equity markets: recovery continuesThe past week has brought significant growth in the stock markets: the S&P 500 index has gained 5%, and the European and Scandinavian indexes — about 3%. Cyclical securities grew especially strongly, outperforming defensive assets by more than 5%. On Friday, the growth continued: the S&P 500 gained 0.7%, the Stoxx 600 - 0.4%. Asian markets are showing neutral dynamics this morning, and futures on US indices are slightly declining.Debt and foreign exchange markets: moderate movementsLast week ended with a decline in US government bond yields: yields on 2-year securities fell by 5 basis points, while 10- and 30-year yields fell by 8 points. The yield curve has straightened somewhat. In Europe, yields, on the contrary, rose slightly, despite the soft comments from ECB representatives. In the foreign exchange market, the EUR/USD pair consolidated in the range of 1.13–1.14. The franc and the yen weakened slightly amid an improvement in global risk appetite. This week, the focus will be on data on inflation, GDP and the labor market in the United States and the eurozone, as well as the meeting of the Bank of ...
The EUR/GBP pair shows uncertain dynamics during the morning session, hovering near the level of 0.8530. The lack of a clear trend is explained by a balanced macroeconomic background, where positive data from the UK is offset by cautious optimism in the eurozone.The March statistics on British consumption exceeded expectations- Annual retail sales growth accelerated to 2.6% (1.8% forecast)- The base indicator (excluding fuel) increased by 3.3% year-on-yearHowever, the April Gfk consumer confidence index deteriorated to -23 points, indicating continued household concerns. The CBI's industrial orders data (-26 points) turned out to be better than expected, but export orders fell to their lowest level since September, reflecting the pressure of global trade risks.German business sentiment (IFO index) showed resilience- The current situation index rose to 86.4 points- The business climate improved to 86.9 pointsAt the same time, the IFO president warned of growing uncertainty among companies due to US tariffs. Comments by ECB representative Claes Noth highlighted the risks of slowing inflation, but retained the possibility of its acceleration in the medium term.EUR/GBP technical analysis for today- Bollinger bands signal a potential downward reversal- The MACD retains a bearish signal- The stochastic oscillator indicator in the oversold zone may limit further declineTrading recommendations- Short positions at the breakdown of 0.8519 with a target of 0.8465 (stop loss of 0.8546)- Purchases on the rebound from 0.8519 and growth above 0.8546 with a target of 0.8601 (stop loss ...