ICE EUA FUTURES TECHS: (25) Resumes Its Uptrend
Oct-03 12:48
- RES 4: €84.50 - High Jan 30 and a key resistance
- RES 3: €84.25 - High Feb 10
- RES 2: €82.12 - High Feb 12
- RES 1: €80.00 - Round number resistance
- PRICE: €76.24 @ 13:29 BST Oct 2
- SUP 1: €74.56 - 50-day EMA
- SUP 2: €71.31 - Low Aug 28
- SUP 3: €68.71 - Low Jun 30 and a bear trigger
- SUP 4: €66.70 - Low May 5
Bullish conditions in ICE EUA futures remain intact and the latest pullback has been a correction. Today’s climb has delivered a print above resistance and the bull trigger at €78.45, the Sep 17 high. This confirms a resumption of the medium-term uptrend. Price has also traded through €78.73, 76.4% of the Jan 30 - Apr 9 bear leg. Sights are on the €80.00 handle next. Firm support lies at €74.56, the 50-day EMA.
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SWEDEN: August Flash Inflation Due Tomorrow; Key For Riksbank Sep Decision (1/2)
Sep-03 12:48
Swedish August flash inflation is due tomorrow at 0700BST/0800CET and will be key in determining whether the Riksbank can cut rates as early as the September 23 decision. Markets currently price the September decision as a coin toss between a 25bp cut and hold.
- The median analyst surveyed by Bloomberg expects CPIF ex-energy inflation at 3.1% Y/Y (vs 3.2% prior), but five of the eleven forecasters expect a sub-3% reading. The Riksbank projected 2.71% Y/Y in the June MPR, but this projection is stale given the large upside surprise seen in June.
- The range of analyst expectations is likely due to differing assumptions on the extent to which summer inflationary impulses (e.g. for package holidays and car rentals) are unwound.
- Although full details of the report will not be available until the final release on September 11, we think that annual CPIF ex-energy disinflation of 0.3pp (i.e. a 2.9% Y/Y or below rounded reading) would be sufficient to give at least three Executive Board members confidence that the summer inflation uptick is likely to be temporary.
- This may pave the way for a (potentially not unanimously supported) cut in September, and drive a material intraday market reaction in SEK FX and rates.
- A 3.0% Y/Y rounded reading would probably also be sufficient to driven some intraday reaction, but would place more importance on the final inflation report to assess underlying inflation details. On balance, it could push the likelihood of another cut into Q4 (i.e. the November or December decisions).
- Headline inflation is expected to accelerate to 3.2% Y/Y (BBG analyst range 3.0-3.5%), from 3.0% in July. This is expected to be driven by a base effect on electricity inflation.
BONDS: EUREX ROLL Pace (update)
Sep-03 12:42
- Buxl: 52%.
- Bund: 62%.
- Bobl: 80%.
- Schatz: 66%.
- BTP: 44%.
- BTS: 52%.
- OAT: 50%.
CANADA DATA: Q2 Labour Productivity Down As US Trade War Hits Factories
Sep-03 12:39
- Canada labour productivity -1.0% in Q2 as GDP -0.7% and hours worked +0.3%. It was the biggest decline since Q4 2022, StatsCan says Wed.
- Manufacturing and wholesale were the biggest contributors to the decline amid US trade tensions.
- Q2 hourly compensation (-0.5%) decreased for the first time since the first quarter of 2021.
- Productivity YOY was 0.0%.
