Warsh Jackson Hole Speech: Markets Eye ECB, Nvidia, Tokyo CPI

Sweden's Q2 GDP print arrived in line with the firm data run that has defined the summer, and focus now turns to household consumption, the one area where retail sales and the consumption indicator paint an unusually mixed picture. The Economic Tendency Indicator reached its highest since 2022 in July, when the survey was collected just after the Iran-US peace agreement. This month's reading, collected in early August, could slip. A continued rise would be a genuine sign of strength.

Norway's August NAV unemployment figure follows Tuesday's strong LFS data. The bank that wrote the note puts more weight on the NAV, which edged higher in July. Its forecast is 2.1% (s.a.), unchanged from the prior month. Retail sales are due as well, with the call for 0.0% month-on-month.

The Jackson Hole symposium continues, and Friday's main event is Fed Chairman Kevin Warsh's speech at 16:00 CET. Markets will parse his remarks for any signal on September's rate decision. The note's authors expect him to stick to his pattern of offering little to no forward guidance.

Euro area inflation reads begin with France and Spain. The note forecasts a rise to 3.4% year-on-year from 3.0%, driven entirely by energy. Pump prices are up 5% month-on-month for gasoline and 8% for diesel. Core inflation is expected to hold at 2.5% year-on-year, with momentum muted. The European Commission's business survey for August is also due, with focus on firms' selling price expectations. Those have declined after rising in March and April, and with services expectations back at pre-war levels, further declines should reduce the case for more than one additional 25-basis-point ECB rate hike.

The ECB's July minutes confirmed that a September hike is the baseline unless the inflation outlook improves materially. Beyond that, they offered no clear guidance. The benign underlying inflation picture, price pressures seen as mainly energy-driven, with little evidence of demand pressure or second-round effects, keeps the ECB in wait-and-see mode after September. The note's authors have changed their ECB call: they no longer expect cuts next year, meaning the deposit rate stays at 2.50% through 2027.

China's official NBS PMI data drops Monday. The manufacturing PMI fell to 49.2 in July, reflecting the summer slowdown. The note looks for a small lift in August, arguing the July plunge overshot compared with industrial metal prices and the high-frequency Yicai activity index, both of which improved this month.

Japan's August Tokyo CPI printed overnight, with core CPI rising 1.8% year-on-year versus expectations of 1.7%, remaining below 2% mainly because of energy subsidies. The index excluding fresh food and fuel rose 2.0% year-on-year, pointing to some broader price firmness, but domestic price pressure remains low. Inflation is still largely imported, not a reflection of strong domestic demand. The 17-18 September BOJ meeting will scrutinise the data closely, with broadening price pressures keeping a September rate hike alive.

Norway's mainland GDP rose 0.3% quarter-on-quarter in Q2, in line with the note's forecast but slightly below consensus and Norges Bank's June MPR estimate of 0.4%. The deviation is too small to shift expectations for the September MPC meeting. Details were softer: private consumption and corporate investment fell short; public demand and mainland exports surprised to the upside. Residential investment was the main exception, coming in slightly stronger than expected.

Equities followed a simple playbook: buy AI, sell everything else. The US tech sector jumped over 3% after Nvidia's earnings, while all other sectors finished roughly 1-1.5% lower. Nvidia climbed 8%. Software was particularly strong after a string of strong earnings that pushed back against the AI disruption narrative; Salesforce gained 22%, CrowdStrike 18%. Semiconductors and memory names failed to participate. SK Hynix and Samsung are both down around 3% this morning, while Micron and AMD also traded lower. The disconnect between what the market prices, an increasingly implied rollover in memory prices, and bottom-up expectations and industry commentary, including recent remarks from Nvidia's CEO, is striking.

US Treasuries remain range-traded through most of August, with the 10-year yield in the middle of the 4.60-4.75% band. EUR/USD hovers around 1.1650. The NOK found support in stronger oil prices, pulling EUR/NOK back below 10.90. EUR/SEK continues to face strong resistance around 11.10, pushing NOK/SEK above 1.02 once again.

US futures are little changed this morning. Asian markets are mixed. Investors are likely to stay in wait-and-see mode until Warsh speaks at 16:00 CET.