Market movers today
• The main market mover today will be the labour market report in the US. We have scaled down our forecast for non-farm payrolls from 190k to 180k given the drop in the employment component in the non-manufacturing ISM and weaker-than-expected ADP employment report. Our forecast remains above the official 165k consensus expectation, but the ‘whisper’ consensus has probably been lowered on the back of the subdued labour market data in the past week.
• In Europe, Germany is scheduled to release industrial and trade balance for April today. We expect industrial production to fall, largely reflecting a payback on strong gain in the previous months. Weaker-than-expected factory orders released yesterday also suggest downside risk on German industrial production today.
• Chinese president Xi Jinping will today start a two-day meeting with President Barack Obama in California. We do not expect China’s exchange rate policy to be high on the agenda as China has delivered continued appreciation in recent months and opened up for faster liberalization of its exchange rate system. Note that China will this weekend release most hard economic data for May.
• We expect growth in oil-related industries to continue to support overall Norwegian industrial production. Danish portfolio flows are likely to show that Danish assets remained popular in April
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Danske Bank