EUROPEAN COUNCIL: Politico-France Not Backing German Push For Swift US Deal
Jun-26 14:19
Politico reports that Germany and France are somewhat at odds with regards to effort to reach a swift trade deal with the US ahead of the 9 July deadline for 'reciprocal' tariffs to kick in.
- Speaking in the Bundestag on 24 June, German Chancellor Freidrich Merz said, "It is ...in everyone's interest that the trade conflict with the United States does not escalate further. I know that the European Commission is negotiating with great caution in this regard, and it has our full support. I hope that we will reach a solution with the United States by the beginning of July,"
- The day before, at an industry conference in Berlin, he said talks risked becoming “far too complicated." Merz: “Negotiating 400, 500, 600 different customs codes with the Americans now is the wrong time for the wrong issue. We now need rapid joint decisions for four of the five major industries: automotive, chemicals, pharmaceuticals and mechanical engineering.”
- Politico: "According to multiple people briefed on the discussions, [French President Emmanuel Macron] does not want to rush into accepting an “asymmetrical” agreement just to meet Trump’s deadline."
- Commission President Ursula von der Leyen is set to update EU leaders on the state of play in trade talks with the US during the working dinner this evening at ~19:30CET.
- The two largest economies in the EU not being on the same page as trade talks continues risks disagreement come the time to endorse or reject the eventual offer on the table.
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US DATA: Conf. Board Labor Differential Weakens Despite Confidence Beat
May-27 14:09
The labor differential within the Conf. Board consumer survey was in firm contrast to the surprise strength in the headline metrics.
- The differential fell further to 13.2 from a downward revised 13.7 (initial 15.1) for its lowest since Sep 2024 and before that Mar 2021.
- The small deterioration on the month came from jobs being perceived as hard to get rising from 17.5% to 18.6%, a joint high with Sep 2024 and last seen higher in Feb 2021.
- That chimes a bit more with the relatively small increase in the overall present situation reading (135.9 after 131.1) compared to the expectations index jumping from 55.4 to 72.8.
SEK: Brief Wave Of SEK Weakness; No Obvious Trigger
May-27 14:06
Fresh wave of weakness seen in SEK crosses. No obvious headline trigger for the move, which has already started fading.
- EURSEK reached a fleeting high of 10.9937, piercing the 20-day day EMA at 10.8952 in the process.
- USDSEK similarly marked above the 20-day EMA (9.6685), before moving back below the handle. The stronger-than-expected US consumer confidence reading at 1500BST will have also support the USDSEK pair.
- Heavy Swedish data calendar tomorrow, with retail sales, trade, lending and wage data due at 0700BST.
EQUITIES: Firmer Cash Markets, But Overnight Futures Gains Fail to Hold
May-27 14:04
- US cash markets gap higher at the open on the overnight ramp in futures as Trump outlined a delay to the higher tariff threat levied against the EU. Tech and travel names trade well on the back of the news - with Teradyne, AMD and Oracle all higher alongside airlines.
- The e-mini S&P still holds 65 point gains on the day, but is off overnight highs. This keeps the price pinned well between the longer-term trend indicators of the 100- and 200-dmas. A bullish trend condition remains intact and the latest pullback is considered corrective. A key support lies at 5719.58, the 50-day EMA.
- Carmakers are the strongest subcomponent, but the performance is far from uniform: Tesla is higher by ~4% against much smaller gains for General Motors and Ford - better S/T trade relations with Europe are underpinning the rally, but Musk's reassurance that he's back working hard for Tesla will be shoring up the price.
- Trade headlines remain an ever-present background risk, but geopolitics is containing any breakout higher in prices after Trump's more belligerent tone with Putin on top of Germany's announcement over the weekend that Western weaponry can be used deeper into Russian territory - allaying any hopes of an imminent reset in Ukraine-Russia relations.
