EU-BILL AUCTION RESULTS: 3/6/12-Month EU-Bills

Riksbank Governor Thedeen speech on "Monetary policy communication in practice" is here: 

Little in the way of commentary ahead of the June 18 decision. But that's not surprising given the content and context of the speech. Thedeen highlights that the current outlook "has led several central banks, including the Riksbank, to emphasise more than before that monetary policy will be determined by new information on the outlook for the economy and inflation. Moreover, some central banks have basically stopped talking about monetary policy going forward"

• "The Riksbank publishes interest rate forecasts because we want to be transparent and provide information that makes it easier to understand how we normally act, which should not be interpreted as information on exactly what we will do"
• "On this basis, it is natural for us to change our interest rate forecast. If conditions change, we may need to adjust monetary policy to keep inflation low and stable".
• "It is important that the uncertainty in the central bank's assessments is recognised and that households, businesses and market participants understand that it exists,” said Mr Thedéen. He thought that this was particularly true for the guidance on future monetary policy, where experience has shown that such guidance can be interpreted as more certain statements than central banks have intended.
• "The Riksbank has continued to publish interest rate forecasts. But we have made some changes to address the communication challenges we have faced, including the communication of the interest rate forecast. We are also now emphasising alternative scenarios more in our communication"

• In the equity space, the trend condition in S&P E-Minis remains bullish. Last Thursday’s initial gains delivered a print above 5993.50, the May 20 high and a bull trigger. The break highlights a resumption of the uptrend and maintains a price sequence of higher highs and higher lows. 6000.00 has been pierced, an extension would open 6057.00 next, the Mar 3 high. Key support lies at 5742.22, the 50-day EMA.
• The trend cycle in EUROSTOXX 50 futures is unchanged, it remains bullish and recent weakness appears corrective. Moving average studies are in a bull-mode position, highlighting a clear dominant uptrend. Sights are on 5516.00, the Mar 3 high and the key bull trigger. Clearance of this level would strengthen a bull theme. Key support to watch lies at 5254.09, the 50-day EMA. A clear break of this average would signal a possible reversal.

• While the Canadian dollar relatively underperforms on Monday, it has extended its impressive advance during Friday’s session, following a robust set of GDP data across Q1 and an associated trimming of cut expectations for this week’s BOC decision. Market pricing now assigns just a ~20% chance of a cut, compared to ~28% prior to Friday’s release.
• Price action backs up the prevailing bear trend for USDCAD (-0.31%) - through which a sell-on-rallies theme clearly persists – evidenced by the 20-day EMA capping the pair’s gains well last week.
• Sights are on 1.3643 next, the Oct 9 low/Sep high. Below here, attention will be on 1.3579, the 1.5 Fibonacci projection of the Feb 3 - 14 - Mar 4 price swing, before the September lows at 1.3420 will garner attention.
• Scotiabank believe the BOC’s case for holding the policy rate is based on much more than last week’s GDP data, explaining that cutting due to the latest inflation & jobs data or demand side risks has little merit. Scotiabank points to inflation expectations remaining elevated, tariff related risks and the fact the markets aren’t pressuring the BOC as bolstering the case for a hold.
• Additionally, while Goldman Sachs think CAD could benefit from a slightly more hawkish BOC in the very near-term, they believe better growth will be the larger positive impulse for the currency in the medium-term.