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 United States, The tech-heavy Nasdaq index recovered after a broad-based sell-off 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 U.S. rebound.
What happened yesterday?
In the United States, The Conference Board’s consumer confidence index came in at 100.4 in June, slightly above the consensus forecast of 100.0. This compares to 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, According to sources seen by Reuters yesterday, Ursula von der Leyen is expected to be reappointed as president of the European Commission. Former Portuguese Prime Minister Costa is expected to be president of the European Council, while Estonian Prime Minister Kallas is expected to 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) maintain 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 EU executive vice-president in charge of competition policy, said the Commission is concerned that “by bundling Teams with its Office applications, Microsoft is giving it an unfair advantage over other video conferencing applications.” The complaint against Microsoft follows one filed on Monday by fellow tech giant Apple, which it accuses of stifling competition in its App Store.
ECB to set interim emissions targets for its corporate debt holdings According to climate disclosures published yesterday, the APP and PEPP targets are on track to be met by 2025. The new targets will be guided by EU benchmark regulations, including mandatory emissions reductions. The targets will be used internally to identify deviations from the desired trajectory, which could lead to “corrective actions” on a case-by-case basis.