SWEDEN: First Positive Annual Corporate Loan Growth Reading Since Nov ‘23
Lending to non-financial corporations rose 0.1% Y/Y in February, up from -0.5% in January for the first positive reading since November 2023. Household lending growth ticked up again to 1.9% Y/Y (vs 1.8% prior). Past Riksbank rate cuts are gradually providing support to credit demand, but recent sentiment indicators (e.g. yesterday’s March Economic Tendency Survey) suggests aggregate activity remains in a subdued state in Q1 2025.
- The average rate on floating mortgages (up to 3-month fix; which account for ~70% of total housing loans) fell to 3.10% in February (vs 3.30% in Jan), but will likely rebound a little in March owing to recent hawkish Riksbank repricing.
- The average rate on mortgages with 3-month to 1-year fixed rates eased to 2.92% from 2.96% prior.
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NORWAY: Ninth Successive Increase In Consumer Confidence
Norway Q4 consumer confidence ticked up to -7.5 from -12.4, the ninth successive increase from a cycle low of -36.8 in Q4 2022. The series remains well below the 2010-2019 average of 13.9 though. From the release: “Expectations for both the country's and the country's economy next year show a significant improvement. The optimism is probably influenced by the expectation of a cut in the key interest rate from Norges Bank and a good wage settlement, expected to be over 4 percent”.
- Looking at the details of the release, the ‘confidence in personal finances’ component rose strongly, now back to “normal levels after falling through the price and interest rate shock”.
- Indicators of major purchases (e.g. interest in buying a car, renovations, travelling) also increased, in lieu of lower propensity to save.
BUNDS: Early Risk Off underpins Bund
- A mixed traded session for Bund, initially gapped higher overnight, it started to fade an hour ago, but went bid on the Cash open to trade near the Overnight high.
- Talk of increase German defence spending (€200bn) and continued Tariff threats from Trump have been doing the round overnight, but looking at multi cross assets, there's very little change overall.
- Still, the Risk Tone is to the downside, and Tech (chip) Stocks will be watched on the Equity Cash open, likely helping the underlying bid in Bund.
- The Opening gap in Bund would be down to 131.85, and as noted Yesterday, a drift towards 131.73, not a Tech level, would just represent a reversal of the French PMI miss.
- The resistance in Bund is at 132.60 (Monday's gap).
- If we look at the US Tnotes (TYH5 is still front), it is still trading at its highest level since mid December.
- Today only sees EU Wage rates, the main focus on the Data front will be on Friday.
- SUPPLY: UK 10yr Linker (won't impact Gilt), Italy €2.75bn 2027 (equates to 24.2k short 2yr BTP) could weigh, the 2036 Linker won't impact BTP, Germany €1.5bn 2053 (equates to 10k Buxl) could weigh. US sells $70bn of 5yr Notes).
- SYNDICATION: Spain 15yr Benchmark.
- SPEAKERS: Fed Logan, Barr, Barkin, ECB Nagel, Centeno, Schnabel, BoE Pill.
BUNDS: /SWAPS: Commerz Look For Eventual Debt Brake Tweak
Commerzbank write “the market's initial excitement may thus well give way to a more sober assessment that it will still be difficult to reform or circumvent the debt brake. At the end of the day, we also expect a deal to be struck, which could involve excluding investment from the debt brake formula, enshrining an extra budget for investment in the constitution or even declaring another state of emergency.”
- “Until this becomes clear, we expect major support in swap spreads to hold at the crucial 50bp mark in €STR-Buxl spreads, also considering the shaky risk-sentiment in U.S. equities.”
