NORWAY: Another Rise In LFS Trend Unemployment Rate
The Norwegian trend unemployment rate ticked up to 4.5% May, the third consecutive increase from 4.2% in Feb, 4.3% in Mar and 4.4% in Apr.
- Although last week’s surprise rate cut was mostly a function of softer-than-expected inflation pressures, some attention was given to the gradual rise in unemployment rates since March.
- At the June decision, Norges Bank wrote that "unemployment has increased a bit more and been slightly higher than we had envisaged. This may indicate that there is a little more spare capacity in the economy than we assumed in March". This idea of more spare capacity chimes with the downward revision to the output gap in the first few quarters of the forecast horizon. Norges Bank increased its estimate of potential output in the June MPR: "The potential output estimate has been revised up in 2025 due to somewhat higher expected growth in underlying productivity and N*"
- On a seasonally adjusted basis, the unemployment rate rose two tenths to 4.5%.
- Employment rose 0.6% M/M, but 3m/3m growth was negative for the second consecutive month at -0.1% The 3mma employment rate was steady at 69.4%.
- A reminder that the June registered unemployment rate is due tomorrow morning. Norges Bank projects a 2.1% rate.
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BRENT TECHS: (N5) M/T Trend Remains Bearish
- RES 4: $75.81 - High Feb 20
- RES 3: $74.63 - High Apr 2 and a bull trigger
- RES 2: $68.28 - 61.8% retracement of the Apr 2 - 9 sell-off
- RES 1: $66.13/81 - 50-day EMA / High May 13
- PRICE: $64.53 @ 07:06 BST May 27
- SUP 1: $58.00 - Low April 9 and the bear trigger
- SUP 2: $56.29 - 2.236 proj of the Feb 20 - Mar 5 - Apr 2 price swing
- SUP 3: $55.10 - 2.382 proj of the Feb 20 - Mar 5 - Apr 2 price swing
- SUP 4: $54.00 - Round number support
Brent futures are unchanged and trade closer to their recent highs. The medium-term trend condition remains bearish and recent gains appear corrective. Attention is on $66.13, the 50-day EMA. It has been pierced. A clear break of the average would highlight a stronger bull cycle and expose $68.28, a Fibonacci retracement. A reversal lower would open $58.00, the Apr 9 low.
BUNDS: A busy Overnight session and a Busy Week ahaed
- A busier session on both sides of the Atlantic Overnight as the US and the UK come back from their Bank Holidays, the big fall in Japanese long end Yields have been supportive of Futures.
- The Tariffs debacle remain at the forefront, after Trump pushed back the date against the EU to that initial 90 days delay on the 9th July.
- While the Trade Risks are still in Focus, Bond Traders have plenty on their hands this Week, rolling Treasuries and Gilt positions into September, and aside from the Data, we also get Month End.
- For today, French prelim CPI, US prelim Durable Goods, and Consumer Confidence are due.
- SUPPLY: Netherland €2bn 5yr (equates to 20.5k Bobl), Italy €2.75bn 2yr (equates to ~21.26k 2yr Short BTP) could weigh, the 2032, 2036 linkers won't Impact the BTP. US sells $69bn of 2yr Notes.
- SPEAKERS: ECB Villeroy, Nagel, Fed Barkin.
BTP TECHS: (M5) Trend Needle Points North
- RES 4: 121.93 76.4% of the Dec 5 ‘24 - Mar 14 bear leg (cont)
- RES 3: 121.43 1.618 proj of the Mar 14 - Apr 4 - 9 price swing
- RES 2: 121.00 High Feb 7 (cont) and a key resistance
- RES 1: 120.72 High May 8 and the bull trigger
- PRICE: 120.57 @ Close May 26
- SUP 1: 119.34/00 50-day EMA / Low May 14
- SUP 2: 118.76/09 Low Apr 15 / 14
- SUP 3: 117.28 Low Apr 10
- SUP 4: 116.06 Low Apr 9
A bull cycle in BTP futures remains intact and recent weakness appears to have been a correction. Key support to watch lies at 119.34, the 50-day EMA. A clear break of the average would signal scope for a deeper retracement, and open 118.76 initially, the Apr 15 low. On the upside, key resistance and the bull trigger is at 120.72, the May 8 high. Clearance of this hurdle resumes the uptrend.
