US: A quiet week ahead - Danske Bank

According to analysts from Danske Bank, trade frictions between the US and China will be in focus over the coming week. The economic calendar looks quiet.

Key Quotes:

“In the US, we have a quieter week ahead of us. The most interesting release is the preliminary Markit PMIs for June due out on Friday. The service sector looks in good shape and it is likely PMI services remains above the 56 mark, with an unchanged print of 56.8 being our forecast. On manufacturing, our models suggest the indices should peak soon but so far it has been difficult to see in either Markit PMI or ISM. Still, we stick to our call that the indices should move lower in 3-6M. Our forecast is PMI manufacturing will decline slightly from 56.4  to 56.0.”

“Following the Fed meeting this week, we plan to analyse the many Fed speeches to get an overview of what the different members think. Overall, it seems to us that the Fed is on autopilot and will continue to raise rates gradually, as the expansion continues.”

“Today, the US government released the full list of goods imported from China (USD50bn) that are hit by the 25% tariff and we will look out for further escalation of the trade conflict next week, especially the US response to the expected retaliation from China.”