REAL ESTATE: Colonial (COLSM: Baa1/BBB+) Q1 25

Handelsbanken now expect the Riksbank to cut rates to 1.50% this year, with cuts in June, August and September, as “the dramatic US tariff increases are leading to a US recession and delaying the recovery of the Swedish economy”.

• Their previous base case saw rates on hold a 2.25% through 2025.
• Handelsbanken note that “with higher tariffs than expected and turbulence in the financial markets, everything now indicates that [Swedish] growth this year will be significantly weaker than we expected in our previous forecast.”
• “Our assessment is that the inflation target is not threatened by the higher tariffs, and that the Riksbank will therefore act to mitigate the negative effects on the economy”. 

• RES 4: 114-10   High Apr 7 and the bull trigger  
• RES 3: 113-09+ 76.4% retracement of the Apr 7 - 9 sell-off
• RES 2: 112-21+ 61.8% retracement of the Apr 7 - 9 sell-off   
• RES 1: 112-08   High Apr 7 
• PRICE:‌‌ 110-25 @ 07:49 BST Apr 9 
• SUP 1: 110-01   Intraday low 
• SUP 2: 109-29   Trendline support drawn from the Jan 13 low  
• SUP 3: 109-13+ Low Feb 24  
• SUP 4: 108-26+ 76.4% of the Jan 13 - Apr 7 bull cycle    

A sharp sell-off in Treasury futures this week has resulted in a breach of both the 20- and 50-day EMAs. Attention is on trendline support at 109-29, drawn from the Jan 13 low. A clear break of this support would strengthen a bearish threat. Note that the steep sell-off could still be a corrective pullback that has allowed an oversold trend condition to unwind. Initial resistance to watch is 112-08, yesterday’s high. A break would highlight a possible early reversal.

Gilt calls, a wide range, 91.03/91.84.

• Note that Bund continues to recover after it fell 115 ticks on the cash Govie Open.