Market movers today
• We expect only a modest uptick in euro area inflation to 1.4% in May and unchanged 1% core inflation. This leaves the ECB plenty of room to cut rates but we expect it to remain on hold. We see the chance of a deposit rate cut as virtually nil, but a higher chance of a refi rate cut.
• German retail sales data and French consumer spending for April will give some info on the state of domestic demand in the euro area.
• It is also worth keeping an eye Italian Central Bank governor Visco’s speech today to see if periphery countries are putting pressure on the ECB to do more.
• In the US, we get April data for personal income, spending and PCE inflation. We expect a modest uptick in personal spending but a decline in prices, lifting real personal spending to a healthy growth rate.
• Finally, it will be interesting to see if the final release of the University of Michigan consumer confidence can hold on to the surge in the preliminary release.
• Danish Q1 national account figures are expected to show that the economy expanded c 0.2% q/q in Q1 from -0.7% q/q in Q4 12.
Click here to read the full report: FX Daily
Danske Bank