SWEDEN: Goods Trade Surplus Narrows; US Exports Show Signs Of Softening
The Swedish goods trade surplus fell to SEK3.9bln in May (vs SEK6.2bln prior), the lowest monthly reding since December. On a 12m rolling basis, goods net trade was SEK66.4bln (vs SEK73.1bln prior). Detailed trade data is still too lagged to fully analyse the impact of US Liberation Day tariffs and subsequent rollbacks, but will be important to track in the coming months as the Riksbank assesses whether downside growth risks are materialising. Markets currently fully price one more 25bp rate cut this year, while the June MPR rate assigned a 50% implied probability of such an outcome.
- Real export data is only available as of April. Despite the US Liberation Day-induced volatility in markets and trade policies, the export volume index was steady at 131 for the third consecutive month. A reminder that real exports were strong in Q1, with net exports contributing 0.8pp to the weak -0.2% GDP print.
- However, nominal exports to the US were SEK14.9bln, down from SEK19.0bln in March (likely tariff front-loading) and SEK16.0bln in February. This was the lowest monthly export total since September 2024. Vehicle exports specifically eased to SEK2.8bln (vs SEK3.0bln in Mar, SEK4.1bln in Feb).
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BONDS: EGBs are pushing higher post French CPI
- A 10 ticks jump for Bund, and 20 ticks in OAT after the French CPI come below Consensus, but initial Tech levels are still untouched.
- The next immediate resistance in OATM5 is at 125.60, so far only printed a 125.40 high.
MNI: FRANCE MAY HICP -0.2% M/M, +0.6% Y/Y
- MNI: FRANCE MAY HICP -0.2% M/M, +0.6% Y/Y
- MNI: FRANCE MAY CPI -0.1% M/M, +0.7% Y/Y
EUROPEAN INFLATION: France Below Consensus, Transport Serv / Comms Softer
French HICP came in notably lower than estimated, falling to 0.62% Y/Y in May vs 0.9% consensus and 0.92% in April. National-level CPI also came in lower, at 0.67% Y/Y (0.9% cons; 0.82% April).
- Looking at national-level CPI, services inflation slowed down to 2.11% Y/Y (2.39% April), with transport services and communications behind the lower print according to INSEE; ahead of the release, analysts expected a decent reversal transport services due to air fares.
- Energy CPI dropped further into deflationary territory, at -8.11% Y/Y vs -7.77% in April.
- Manufactured goods CPI meanwhile was little changed at -0.23% Y/Y (-0.17% April).
- Food CPI accelerated a little, to 1.34% Y/Y vs 1.24% April.
