EM CEEMEA CREDIT: SOAF: plans to reshuffle cabinet

• The Yen continues to print fresh broader lows, the USDJPY has now gained 142 pips taking its cue from the fall in long JGB Yield since the MOF source story on possibly reducing Bond issuance in the longer-end.
• Next stop would see Friday's high at 144.14, but better will be seen at the 144.40/144.49 area, respectively Thursday's high and 20 day EMA.

The Swedish Economic Tendency Indicator eased back to 94.6 in May (vs 95.0 prior). The index has now been below the neutral 100 handle for 34 consecutive months. Sentiment fell in all industries other than construction, and while consumer confidence ticked up, it remains at heavily subdued levels. The survey doesn’t provide a clear steer for the Riksbank. Weak sentiment works in favour of a rate cut in June, but expected price metrics remain elevated. There's still plenty of data due later this week, including the final Q1 GDP report.

• Services and manufacturing sector expected prices moved higher in May. The retail expected price balance moved down to 34 from 45 prior, but food and beverage expected prices are still worryingly sticky at 75 (vs 78 prior).
• Expected employment signals remain soft, but the tick higher in labour hoarding metrics suggests this may not necessarily result in even higher unemployment rates.
• Consumer confidence ticked up to 83.1 (vs 81.8 prior). In a recent note, JP Morgan ran an analysis suggesting “a one standard deviation change in [consumer] confidence (10.2pts) impacts consumption by 0.3% saar. Since the beginning of the year, confidence has plummeted 2.0 standard deviations, ie suggesting a 0.6% saar hit to consumption”.
• The initial tariff impact amongst manufacturing respondents appears limited: “Two out of ten firms indicate that their production volumes have slightly declined due to changes in tariffs. Looking ahead, just over four out of ten firms expect a decrease in production volumes due to either altered tariffs or the prevailing uncertainty regarding tariffs; however, this too is assessed to occur only to a limited extent”.