EQUITIES: Broader lows on both sides of the Atlantic

5s30s unable to break decisively above 140bp at this stage, but still on track for the highest close of ’25.

• Looking a little more granularly, the next major point of upside interest beyond 140bp is probably located at the April intraday high (147.2bp according to BBG), although the lack of liquidity apparent at that time brings into question the true intraday high in the spread.

• RES 4: 0.8781 2.236 pro of the Mar 3 - 11 - 28 price swing 
• RES 3: 0.8738 High Apr 11 high and a key resistance
• RES 2: 0.8694 High Apr 14 
• RES 1: 0.8661 Intraday high 
• PRICE: 0.8655 @ 14:38 BST Jul 2
• SUP 1: 0.8521/8486 20- and 50-day EMA values 
• SUP 2: 0.8459 Low Jun 11 
• SUP 3: 0.8407 Low Jun 4 
• SUP 4: 0.8356 Low May 29 and the bear trigger 

The trend condition in EURGBP remains bullish and this week’s gains together with today’s acceleration, reinforce current conditions. Moving average studies are in a bull-mode position - highlighting a dominant uptrend. 0.8648, 76.4% of the Apr 11 - May 29 downleg, has been pierced. A continuation higher would open 0.8738, the Apr 11 high and a key resistance. Support to watch lies at 0.8521, the 20-day EMA.

The dovish June 18 Riksbank decision has been followed by a string of weak domestic data. Since June 23, the 2-year SEK swap rate has fallen 17bps, and markets now assign a ~50% implied probability of another rate cut as soon as August (up from ~25% a week ago, according to latest estimates from SEB). As such, the Swedish krona has underperformed the G10 basket over the past week.

• EURSEK is up another 0.25% today, hovering just below clustered resistance at the 200 DMA (11.2319) and April 11 high (11.2384). Beyond these levels, resistance is seen at 11.3203 (76.4% retrace of the Feb 3 to Apr 3 selloff).
• On the other hand, USDSEK remains close to multi-year lows amid the broader dollar-negative environment. The 50-day EMA at 9.6544 presents initial resistance.
• Data since the Riksbank’s June decision has included a weak Economic Tendency Survey (which had the hallmarks of the Riksbank’s June MPR “dovish” alternative scenario) and the weakest monthly retail sales print in 30 years. Meanwhile, the June manufacturing PMI eased a little to 51.9 (vs 53.1 prior). The services PMI is due tomorrow, with June flash inflation set to cross next Monday.
• We wrote earlier today that Scandinavian currencies have historically outperformed in July. From a more medium-term perspective, JP Morgan write that “SEK, and to a lesser extent NOK, have benefitted and can do so further from their large US equity holdings via either (1) increased FX hedging of USD exposure, (2) a rotation from US to RoW equities, or (3) outright sales and repatriation in equity drawdowns”.
• However, near-term risks may still be tilted towards further SEK weakness, given the Riksbank’s comfort with cutting further if justified by the data.