In South Korea, industrial-production growth should continue to decline. Forecasts expect production to shrink by 0.9% year-on-year in May, following on from a 0.1% fall in April. Again, intensifying trade tensions will likely dampen activity going forward. The UK GfK Consumer Confidence Index is forecast to come in at -11 in June, slightly below May’s reading, but broadly in line with its long-term average of -9. This is an improvement from the lower readings of -13/-14 seen since November 2018. There is persistent optimism about personal finances, probably due to the solid labour market. This seems to have offset rising concerns about the broader economic situation which is likely weighed down by continued Brexit-related uncertainty. Elsewhere, Japan’s unemployment rate should remain unchanged at 2.4% in May. The labour market is tight, with the jobless rate stabilising at very low levels, averaging 2.4% throughout 2018 and 2019 so far. Separately, industrial production should rise by 0.6% month-on-month in May, following a similar increase in April and a quarter-on-quarter contraction of 2.6% in Q1. Meanwhile, in the eurozone, inflation – defined by the Harmonised Index of Consumer Prices (HICP) – was probably unchanged at 1.2-1.3% in June, compared to 1.2% in May. Some cross-currents have been in place in June: gasoline prices responded to developments in the international oil price and fell by about 1.5%, while core inflation likely bounced back to 1.1%, up from 0.8% the month before, due to some Easter-related volatility in service prices. We expect only a modest improvement in core inflation in 2019, leaving it well below the European Central Bank’s (ECB) 2% target. In the US, recent Consumer Price Index and Producer Price Index reports suggest that core personal consumption expenditures (PCE) inflation – the Fed’s preferred gauge of underlying inflation – is likely to have remain unchanged in May, at 1.6%. Even accounting for special factors that are putting downward pressure on some components (portfolio management fees, apparel and airfares), underlying price dynamics look subdued. Elsewhere, the G20 summit starts in Tokyo. The focus will be on the bilateral meeting between US President Donald Trump and Chinese President Xi Jinping, which now seems set to go ahead after a period of uncertainty. Trump has indicated that his decision on whether to impose the next round of tariffs, of 25% on $300bn-worth of Chinese goods, will depend on the outcome of the meeting. Our base case is that the meeting will result in a truce: we think that new tariffs will not be implemented, but the current ones will stay in place. There remains a significant risk of escalation though, given that respective positions remain divergent. The US administration maintains that the resumption of negotiations is dependent on China’s acceptance of the previous agreement draft, along with a focus on an enforcement mechanism for the deal, with the latter proving particularly problematic for China. Separately, European leaders will continue to discuss the appointment of the top EU positions on the sidelines of the G20 summit, before a working dinner on 30th June, which was scheduled following the failure to reach an agreement at the EU Council meeting last week.