Nordic outlook is bright, but downside risks are rising
The Nordic recovery is on track despite some surprises in the Q2 GDP components and rising downside risks. Real goods exports underperformed given the rebound in external demand, reflecting stress in supply chains and input shortages for the region’s trade-sensitive economies.
What you will learn:
- Nordic export order books are among the highest in Europe, so the external sector, which is reliant on industries most affected by the shortages and bottlenecks, should make up for the temporary weakness once they ease.
- The resilience of overall industrial production and fixed investment has provided important support.
- While growth in industry is likely to moderate and be subject to temporary setbacks, the long-term outlook remains solid as the backlog of orders is eliminated and inventories are replenished.
Eurozone: ECB minutes indicate that July rate hike is a near-certainty
The minutes from the April ECB meeting confirm the hawkish tilt initiated a few months ago continues to gain momentum. With a majority of the council increasingly concerned about the inflation outlook, this makes an interest rate hike already in July almost certain. This should not come as a surprise, however, as recent developments render hawks' case arguably easier to make.Find Out More
For how long will Japan’s households support bonds and the yen?
Households' financial surpluses sharply increased in 2020 and remained high in 2021 due to the Covid pandemic. Most of the surplus continued to go to cash and deposits, but there was a notable increase in funds going to investment trusts (with a large portion invested in foreign equities) in 2021. Amid rising international yield differentials and a weakening yen, there is market chatter about whether this is the beginning of a structural shift from households' risk-averse investment style?Find Out More