STIR: EUR Implied Rates Unfazed By Latest Tariff Threats

Gilt calls, 91.88/91.97 range.

No major surprises in the Swedish May budget balance, which printed a SEK51.1bln surplus broadly in line with the National Debt Office’s (NDO’s) SEK50.1 forecast. 

• The primary balance surplus was lower than expected at SEK35.3bln (vs SEK 40.7bln NDO). However, this was offset by lower-than-expected net lending to government agencies (surplus of SEK19.5bln vs SEK12.9bln NDO).
• The NDO launched the new 10-year 2.50% Oct-36 SGB 1067 last week via auction. The auction attracted a 1.82x bid-to-cover ratio for the SEK6bln issued. This was below the 2.63x average cover ratio for auctions of the previous on-the-run 10-year SGB (SGB 1066).
• This may represent an adjustment to the new, larger, SEK6bln nominal auction sizes (following the May ’25 borrowing report, which saw an upward revision to deficit and debt forecasts), but we also note that last week was shortened by the Swedish National Day Public holiday.
• The NDO is due to sell another SEK6bln of the SGB 1067 this Wednesday, followed by three SEK2bln exchange auctions across June 12 – June 16th.

• RES 4: 0.6603 High Nov 11 ‘24  
• RES 3: 0.6582 High Nov 12 ‘24
• RES 2: 0.6550 61.8% retracement of the Sep 30 ‘24 - Apr 9 bear leg
• RES 1: 0.6538 High June 5
• PRICE: 0.6519 @ 07:54 BST Jun 9 
• SUP 1: 0.6452/6404 20- and 50-day EMA values 
• SUP 2: 0.6357 Low May 12    
• SUP 3: 0.6275 Low Apr 14 
• SUP 4: 0.6181 Low Apr 11 

Trend signals in AUDUSD are unchanged, they are bullish and the pair continues to trade closer to its recent highs. Key support lies at 0.6404, the 50-day EMA. A clear break of this average is required to highlight a potential short-term reversal. The pair has recently cleared a key short-term resistance at 0.6515, the May 7 high, confirming a resumption of the uptrend. Sights are on 0.6550, a Fibonacci retracement.