EU ENERGY SECTOR: BP (BPLN): Castrol Majority Sale 

The recovery in the Swedish residential construction sector remains sluggish. Although this year’s rate cuts have provided financial relief, concerns around short- and long-term demand have constrained starts, and prevented completions from bottoming out. Property prices have started trending higher from 2023 lows, but remain well below 2021/2022 levels. 

• Total housing starts increased by 6.5k in Q3, down from 7.5k in Q2. Measured as a 4Q rolling sum, total housing starts rose 26.9k in Q3, up from 25.4k in Q2 for the highest in a year.
• The number of completions remains firmly on a downward trend though, increasing 31.5k in Q3 after 35.3k in Q2 and 50.6k a year ago.
• While dwelling investment in the national accounts has rebounded from the Covid-induced slump, recent quarters have seen more stable (but no longer increasing) readings. Q3 GDP is due on Thursday.
• Although sentiment indicators in the Economic Tendency Indicator have stabilised in recent months (see charts), they remain below pre-covid averages.
• Furthermore, the Riksbank’s latest Business Survey noted that:
  • “In residential and commercial construction, projects are sometimes being postponed because of uncertainty about how demand will develop. The weak demand for new housing means that construction companies can basically only sell projects that have largely been completed”
  • ”Construction companies hope that the lower level of interest rates and the upcoming fiscal policy stimulation measures will kick-start the wider economy. At the same time, they see households as “so hesitant” and are unsure whether the measures will be enough to boost demand for new homes”.
  • “In a longer perspective, the major construction companies emphasise that there is already a high supply of housing in the major cities, while population projections do not indicate that demand for new housing will increase in the years ahead.”

As expected circa 50% of the Roll are completed. Would expect for 80% to be done by the end of the Day given the shorter US Week.

• WNA: 55%.
• USA: 55%.
• UXY: 51%.
• TYA: 50%.
• FVA: 57%.
• TUA: 56%.
• Gilt: 38% (as of Friday).

• RES 4: $56.153 2.500 proj of the Aug 20 - Sep 16 - 17 price swing   
• RES 3: $55.444 2.382 proj of the Aug 20 - Sep 16 - 17 price swing
• RES 2: $55.000 Round number resistance
• RES 1: $54.480 - High Oct 17 and the bull trigger   
• PRICE: $49.972 @ 08:10 GMT Nov 24
• SUP 1: $48.644 - Low Nov 21  
• SUP 2: $47.876/45.557 - 50-day EMA / Low Oct 28 
• SUP 3: $41.135 - Low Sep 17
• SUP 4: $38.087 - Low Aug 27  

Trend signals in Silver remain bullish and short-term weakness is considered corrective, for now. Support to watch lies at the 50-day EMA, at $47.876. A clear breach of this average would signal scope for a deeper retracement. On the upside, a resumption of gains would refocus attention on the bull trigger at $54.480, the Oct 17 high. Clearance of this level would confirm a resumption of the primary uptrend and open $55.444, a Fibonacci projection.