Today's focus
China will release May industrial profits last night. April profits increased 4% year-on-year and are expected to be roughly the same in May. Stronger export growth and higher commodity prices compared to last year should boost profits, but tough competition is putting pressure on profit margins. The next big market move for China will be the PMI on Sunday, June 30th.
In Sweden, the market is eagerly awaiting the Riksbank's decision tomorrow. However, the market must be content with the May PPI figures, released today. The figures will be negatively affected by the sharp fall in electricity prices, as evidenced by the CPIF. However, we do not expect any significant changes to the domestic supply price component of the PPI for consumer goods, which is the relevant measure for assessing the impact of PPI on CPIF commodity prices.
Economic and Market News
What happened overnight
In the US, the tech-heavy Nasdaq index recovered after a broad decline on Monday led by chipmaker Nvidia. The Nasdaq rose 1.3%, recouping Monday's losses. Asian tech stocks are up big this morning, following yesterday's rebound in the US.
What happened yesterday?
In the U.S., The Conference Board's June consumer confidence index came in at 100.4, slightly above the consensus forecast of 100.0. This compares with a revised reading of 101.3 in May. Unlike a similar survey from the University of Michigan, the Conference Board's index has consistently outperformed its historical average over the past few years because it focuses more on labor market conditions than personal financial situations (including inflation).
In the EU, Ursula von der Leyen is set to be reappointed as Commission president, a source confirmed to Reuters yesterday. Former Portuguese Prime Minister Costa will be named European Council president, while Estonian Prime Minister Kallas will be named EU foreign policy chief. The three nominations were widely expected after the European Parliament elections earlier this month saw four pro-EU parties (Social Democrats, European People's Party, New Party and Greens) retain a majority. If the three officially take the top posts, it will bring some calm to the EU's political uncertainty, especially after the French elections. A second term for von der Leyen would mean continuity in EU politics, while Kallas's high-ranking representative would mean continued support for Ukraine.
The European Union has filed antitrust charges against Microsoft. Margrethe Vestager, the European Commission vice-president in charge of competition policy, said the Commission is concerned that “Microsoft's bundling of Teams with its Office applications has given Teams an unfair advantage over other video conferencing applications.” The charges against Microsoft follow those filed on Monday against fellow tech giant Apple, which is accused of stifling competition in its App Store.
According to climate disclosures published yesterday, the ECB will set interim emissions targets for its APP and PEPP corporate debt holdings. The new targets will be based on EU benchmark regulations that include mandatory emissions reductions. The targets will be used internally to identify deviations from the desired trajectory and “corrective measures” may be taken on a case-by-case basis.