NATO: Leaders Meet To Sign Off On 5% Spending Commitment
NATO leaders are delivering doorstep comments ahead of the main session of the alliance's summit in The Hague later this morning. Secretary General Mark Rutte is due to speak alongside US President Donald Trump shortly, followed by the welcoming ceremony and 'family photo' shortly. The meeting of the 'North Atlantic Council' (the collective group of NATO countries) at leaders' level gets underway ~10:30CET (04:30ET, 09:30BST ), with a live stream here.
- Rutte will hold a press conference after the Council meeting, at ~13:45CET (07:45ET, 12:45BST). He will then meet with the 'Indo-Pacific Partners' (Australia, Japan, New Zealand, South Korea) at 14:30CET (08:30ET, 13:30BST). The only IP-4 partner to have their head of gov't travel to the summit is New Zealand, with PM Christopher Luxon in attendance. All others have sent their foreign ministers.
- At ~15:30CET (09:30ET, 14:30BST) Rutte and the leaders of the E5 (France, Italy, Germany, Poland, Ukraine) will meet with Ukrainian President Volodymyr Zelenskyy. It is also expected that Zelenskyy will meet with President Trump during the course of the summit.
NATO leaders are expected to sign off on a much briefer communique than is usually the case at these events, due to its truncated nature (down to one session lasting a couple of hours, compared to the normal multiple sessions lasting several hours each). Commitments on the '3.5%+1.5%' of GDP on defence spending likely to be agreed, although potentially with wording that allows Spain, still holding out on the 5% total, to accept.
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SCANDIS: Important Supports Being Tested Across Scandi Crosses
Important supports in Scandi crosses are being tested this morning, clearance of which could extend recent outperformance against the broader G10 basket. The improved risk backdrop following the US/EU 50% tariff delay has provided a tailwind to NOK and SEK today, though the Scandis also traded resiliently in the wake of Trump’s initial tariff announcement last Friday.
- This suggests the broader theme of rotation out of the USD is continuing to benefit NOK and SEK (alongside the EUR) as has been the case through this year.
- Key near-term supports to watch:
- EURSEK (-0.3% today at 10.8010): April 4 low at 10.7941. A clear breach of this would expose 10.6652 (April 3 and multi-year low).
- USDSEK (-0.5% today at 9.4820): April 22 low at 9.4704.
- EURNOK (unch today at 11.4830): May 23 low at 11.4621. The cross has pared around 80% of the sharp 8.55% rally seen between April 2 – April 11
- USDNOK (-0.5% today at 10.0690): December 2023 low at 10.0562, clearance of which would expose the July 2023 low at 9.9249.
- The last week’s price action still leaves an uptrend in NOKSEK intact, with the uptrend drawn from the April 9 low underpinning the cross, helping narrow the gap to the key 0.9500 medium-term pivot level.
- This week’s Scandi calendar is heavy, with activity data due from both Sweden and Norway. While a June Norges Bank cut seems highly unlikely at this stage, a weak set of Swedish readings could tilt the balance in favour of a June Riksbank cut to 2.00%.
