In focus today
Today is relatively quiet in terms of significant economic data releases, though we note a few items.
In Denmark, retail sales figures for July will be released. Our Spending Monitor showed a 1.2% m/m increase in real retail spending in July, following a setback of -1.4% m/m in June. We expect the figures from Statistics Denmark to reflect the same trend, with an increase in July.
In Sweden, household lending is expected to grow at a similar rate as the previous month, likely around 2.5%. This release is expected to have minimal impact on Swedish markets.
In Norway, the monthly LFS-statistics is released. In recent months this release has shown an unusual labour force driven rise in the unemployment rate which is very unusual given the stage of the business cycle that Norway currently is in. The report will thus be scrutinized for details as to the true picture of the labour market with Friday’s upcoming registered unemployment report also adding important information to policy makers.
Finally, Nvidia wraps up Big Tech earnings today, reporting Q2 results after the bell.
Economic and market news
What happened yesterday
In the US, the Conference Board’s August consumer sentiment survey showed a slight weakening, with the index declining to 97.4 (cons: 96.2, prior: 98.7). A rising number of consumers perceive jobs as ‘hard to get’ and expect fewer jobs to be available over the next six months. Notably, inflation expectations have risen after declining from May to July. This shift mirrors a similar shift in the Michigan survey and could raise concerns for the Fed.
Also in the US, Fed Governor Cook announced plans to sue over President Trump’s attempt to dismiss her – a move that has re-introduced the theme of Fed independence. Her lawyer deemed Trump’s attempt baseless, while the Fed underscored that 14-year terms safeguard decisions for “the long-term interests of the American people.” The Fed stated that Cook’s status remains unchanged unless a court rules otherwise before the 16-17 September meeting. Markets responded with equities wavering, the yield curve steepening, and the dollar weakening, supporting our view of the USD’s strategic downtrend.
In Sweden, we got the Riksbank’s Minutes which indicated that while the Board is more vigilant regarding the recent inflation uptick, it still views this as likely temporary. The Minutes highlight a delicate balancing act: while the Swedish recovery could benefit from further monetary policy support, this must not come at the cost of undermining the Riksbank’s inflation target credibility. In our view, the Minutes suggest that inflation remains too high for a rate cut in September unless August figures surprise significantly. However, the Board may consider cuts later if inflation trends lower in a more plausible manner. Read more in Riksbank Minutes – August 2025, 26 August.
In Hungary, the central bank (MNB) held its key rate steady at 6.50%, as expected, maintaining a joint-high with Romania for the highest policy rate in the EU. With MNB policymakers focused on re-anchoring the inflation expectations amid still elevated price pressures, most likely the policy rate will be kept at current 6.50% for the foreseeable future, barring any major surprises.
Equities: Equities were mixed on Tuesday. Europe was burdened by the selloff in French banks (Stoxx 600 -0.8% and CAC40 -1.6%). With French banks down more down in the ballpark of 4-7%, it may seem like an overreaction (and we believe it is) but it is not a rare reaction function in markets when things like this happen. As the credit risk increased as a result of the gridlock on fiscal policy, investors took a “better safe than sorry” approach, trying to be the first one out. This has less to do with actual earnings, but more about positioning and equity risk premium correcting, which tends to be more short-lived.
US markets rebounded mid-session, closing near session-highs (S&P 500 0.4%, Russell 2000 0.8%). This erased the drift lower on Monday, following Friday’s big rally. Risk on in sector performance, with industrials and banks in the lead, outperforming defensive groups like consumer staples by almost 2p.p. Health care sector also solid, following positive trial results from Eli Lilly’s weight loss pill. Asian markets are marching higher again this morning, with Shenzhen marching 1.3% higher (and 13% higher the last 30 days).
FI&FX: With an empty calendar in terms of macro releases, global yields drifted slightly lower during yesterday’s session. The spread widening continued between France and Germany and French banks dropped, while broader EUR proved resilient. With a thin macro data calendar today, the focus will be on tonight’s Nvidia earnings, which could influence the broader risk sentiment. In Norway, we see the case for some spread widening in the near term and we recommend to pay 2Y NOK vs both GBP and SEK covered bonds as tactical trades.