Fra Danske Bank:
Emilie Herbo, [email protected] , Assistant Analyst
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In Sweden, March labour market statistics is set to be published. Our forecast is that the unemployment rate will remain unchanged from February at 8.4%, seasonally adjusted, although LSF data is very volatile. The labour market has shown a positive trend recently, reflecting stronger economic activity last year.
In the UK, CPI inflation for March is released. The UK has been on a continuous disinflationary path since last fall. Now we can expect an inflation surge, which will weigh on consumers. The Bank of England (BoE) will look closely for second-round effects, but with the cooling labour market in mind, the recession risk is probably more imminent than the inflation risk. We expect the BoE on hold for the foreseeable future.
In Denmark, the April consumer confidence indicator will be released. In March, consumer confidence dropped to -13.8, influenced by the ongoing US-Iran conflict and its impact on energy prices. With significant uncertainty and no resolution in sight at the time of the survey, we expect the indicator to decline further in April. As the survey directly addresses price expectations, consumer insights will be particularly important.
In Japan, April PMIs are released overnight. Consumers have largely been shielded from higher oil prices through gasoline subsidies, which should keep the service sector strong. In manufacturing, the new orders index corrected lower to 51.3 in March but remains above 50. At large, we think all the pieces of the puzzle are in place for the BoJ to hike again. However, the probability of an April rate hike has been priced out recently and we have not seen much push-back from Governor Ueda. We expect the next hike in June or alternatively July, much dependent on the state of the energy market by then.
Economic calendar
In the Middle East conflict, Trump extended the ceasefire indefinitely just before its expiry after Iran refused further negotiations due to unreasonable US demands. This marks a U-turn in tone, as Trump had earlier ruled out an extension and hinted at military action. With Iran reportedly not requesting the ceasefire and the Strait of Hormuz issue still unresolved, Iran appears to hold the upper hand at present. Following the news, Brent crude held above USD98/bbl.
In Germany, the ZEW index in April fell more than expected. The assessment of the current situation declined to the same level as in January, which was slightly more than expected, while expectations took an unexpectedly large plunge to the lowest level since 2022. The data paints a bleak picture of the German growth outlook, which is a dovish signal for the ECB, although their communication clearly shows that the Governing Council is more concerned with curbing upside inflation risks compared to downside growth pressures.
In the UK, the latest labour market report provided mixed signals. The report includes March data on payrolls but February data on the rest, making it largely outdated. March payrolls revealed a loss of 11K jobs and thus payrolls are once again pointing down. February was also revised lower. On the other hand, unemployment nosedived to 4.9% (prior: 5.2%, cons: 5.2%). Additionally, the trend for lower wage growth was not as strong as expected. Cost effects on wages will thus be worth keeping an eye on going forward.
In the US, March retail sales surprised to the topside, with the core control group measure (excluding autos, gas, building materials, and food services) rising 0.7% (prior: 0.6%, cons: 0.2%). While higher gasoline prices naturally lifted nominal headline sales, the stronger-than-expected growth in the core measure suggests consumer demand remained resilient during the initial weeks of the war, despite sentiment indicators trending lower.
ADP’s weekly private sector employment estimates also turned surprisingly sharply higher, as the 4-week average reached 55k in the week ending 4 April, which is the highest reading since ADP started publishing the weekly estimates last fall. While – all else equal – this could indicate a strong April Jobs Report, it is worth noting that the correlation to Non-Farm Payrolls is far from perfect.
Also in the US, Fed chief nominee Warsh testified before the Senate Banking Committee, calling for “regime change” at the Fed, including a new inflation framework, gradual balance sheet reduction, and an overhaul of forward guidance – largely in line with previous remarks. Warsh criticised the Fed’s handling of inflation post-Covid-19 and emphasised the importance of monetary policy independence despite political pressure. Senator Tillis stated Warsh’s confirmation would be delayed until the Department of Justice investigation into Powell concludes, adding uncertainty to the timing.
Equities: Risk assets had a poor day yesterday, with near-term dynamics in the hands of the Iran war. Oil jumped and briefly touched above USD100/barrel to settle around USD98barrel. The market dynamics gave flashback to the playbook we saw earlier in this war, being the Energy sector the only performing one with the rest of the sectors in negative territory. Global equities ended 0.7% lower, with S&P500 and Nasdaq around 0.6% lower. Russell 2000 ended 1% lower. Overnight Asian equities are mixed, while futures are up in the US, and lower in Europe.
FI and FX: Global yields rose across tenors yesterday as markets were eyeing the initial deadline for the ceasefire Wednesday evening in Washington until Trump extended the ceasefire indefinitely just before its expiry after Iran refused further negotiations, citing unreasonable US demands. Following the news, Brent crude held above USD98/bbl. EUR/USD edged lower yesterday amid solid US macro data, Kevin Warsh’s remarks at the Senate and a setback in ceasefire talks. EUR/DKK traded slightly below the recent 7.4735 top yesterday as the upwards pressure eased slightly. EUR/GBP ended the day below 0.87 as the UK jobs report and political jitters failed to trigger a meaningful move. Gilts underperformed peers as political jitters came back in focus with prediction markets having ramped up bets that PM Starmer will be out before 2027 to around 70%.
See also our in-depth FI and FX morning comment *
Yield Outlook – Tough decisions ahead for central banks , 21 April
Reading the Markets USD – Steady EUR/USD as SOH status in doubt , 21 April
FX Forecast Update – USD erases war-fuelled gains as downtrend resumes, 17 April
Reading the Markets Norway – Stagflation risks: look for Red-Green and 2s10s bullish steepeners, 17 April
Reading the Markets EUR – From spring hikes to summer hikes; receive 2Y1Y ESTR swap , 16 April
Report completed: 22 April 2026, 07:00 CEST
Report first disseminated: 22 April 2026, 07:30 CEST
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Hurtige nyheder er stadig i beta-fasen, og fejl kan derfor forekomme.
