SEK: Intraday Underperformance Driven By Broader Dollar Price Action
SEK underperforms the G10 basket this morning, with EURSEK up 0.35% and USDSEK up 0.5%. The broader dollar uptick appears to be the primary driver of SEK weakness intraday. 2- and 5-year SEK rate differentials versus EUR and USD are little changed on the session. Looking ahead, idiosyncratic SEK moves may be dictated by domestic growth developments. Analysts and the Riksbank expect fiscal and monetary support to drive a cyclical recovery in the coming years.
- EURSEK has pierced initial resistance at the 20-day EMA (11.0097), exposing the 50-day EMA at 11.0442. Rallies short of the 50-day EMA are considered corrective, with the broader moving average study set-up still bearish for now.
- The bounce in the broader dollar index sees USDSEK push though the Sep 25 high of 9.4856. Technical conditions are in place for a climb towards the 9.6000 handle.
- NOKSEK remains shy of the resistance zone around 0.9500 that we highlighted yesterday.
- There was some talk amongst analysts as to whether this week’s Verisure IPO would drive modest SEK weakness. Verisure opted to list on the Nasdaq Stockholm exchange in Euros (i.e. not krona). The IPO priced yesterday, with a settlement date of Friday. Danske Bank estimated there could be “somewhere between 1.7bn and 2.2bn worth of EURSEK being bought on or around the IPO date”.
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GERMAN AUCTION PREVIEW: 0% Aug-31 / 2.50% Feb-35 Green Bunds
This morning, Germany will hold a Green Bund auction. On offer will be E500mln of the 0% Aug-31 Green Bund (ISIN: DE0001030732) alongside E1bln of the 2.50% Feb-35 Green Bund (ISIN: DE000BU3Z047).
- The size is in line with the combined E1.5bln seen at the last Green Bund auction in late July.
- Recent auctions in the German 5-10 year Green Bund segment have passed smoothly, with solid bid-to-covers (in a 2.07x to 3.76x range since May), bid-to-offers (1.92x to 3.75x range since May) and the low prices above the secondary market mid-prices throughout 2025. The last auction with weaker demand metrics was the 2.50% Feb-35 Green Bund on April 8 (1.32x bid-to-cover, 1.05x bid-to-offer).
- For the last 2.50% Feb-35 Green Bund auction on 22 July, the bid-to-cover stood at 2.07x, while the bid-to-offer came in at 1.92x.
- However, for non-green Bunds, demand was mixed at best recently. On September 3, the 2.60% Aug-35 Bund saw a bid-to-cover of 1.45x and a bid-to-offer of 1.10x, while the new opening of the 2.50% Nov-32 Bund on August 27 saw metrics of 1.19x and 0.79x, respectively.
- Domestically in Germany, the government's "autumn of reforms" is set to start this week, meaning a) income tax changes, b) social security net cuts and c) pension system reform are all being discussed if not in the pipeline. The backdrop remains weak growth, a E30bln+ gap in the 2027 budget as well as right-wing AfD polling close to the largest party nationally.
- The next German auction will be tomorrow's dual-tranche E1bln of the 4.75% Jul-40 Bund (ISIN: DE0001135366) alongside E1.5bln of the 2.60% May-41 Bund (ISIN: DE000BU2F009), while the next German green auction will be on October 21.
- Timing: Results will be available shortly after the bidding window closes at 10:30BST / 11:30CET.
SPAIN T-BILL AUCTION RESULTS: 3/9-month letras
| Type | 3-month letras | 9-month letras |
| Maturity | Dec 5, 2025 | Jun 5, 2026 |
| Amount | E923mln | E1.604bln |
| Target | E2-3bln | Shared |
| Previous | E900mln | E1.625bln |
| Avg yield | 1.91% | 1.968% |
| Previous | 1.93% | 1.959% |
| Bid-to-cover | 2.44x | 1.76x |
| Previous | 2.32x | 2.14x |
| Previous date | Aug 12, 2025 | Aug 12, 2025 |
EURIBOR OPTIONS: Z5 Call Spread Buyer
ERZ5 98.0625/98.125 call spread, bought for 2 in 4k
