Market movers ahead
In the US , the most important release next week is the minutes from the April FOMC meeting due on Wednesday. The minutes will likely show that the FOMC members have had a rich discussion and that the committee is divided. Since the April jobs report was weak we nonetheless think the door for a June hike is closed no matter what the minutes say. On Tuesday we expect the core CPI release to show an April rise of 0.2 % m/m implying a core inflation rate of 2.1 % y/y.
In the euro area it is a very light calendar in terms of data releases. The HICP inflation print will give us more insight into the Easter effect. We dont expect the ECB minutes to reveal any significant news.
In the UK , everything continues to be driven by the upcoming EU in/out referendum. The most important economic release will be the labour market report.
There are several important data releases in China next week which should give us more information on the economic development across sectors.
There are no market movers in Japan next week
It is a quiet week in Scandinavia next week.
Global macro and market themes
The market has become overly pessimistic on US growth in our view.
The USD has bottomed and will strengthen near term, particularly vs. European currencies.
The window for higher euro yields has closed on Brexit risks and flows.
Brexit risks, a stronger USD and falling China credit growth suggest that risky assets will underperform near term.
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