SWEDEN: January Flash CPI Due 0700GMT/0800CET Tomorrow
Swedish January flash inflation is due tomorrow at 0700GMT/0800CET. The Riksbank projected CPIF ex-energy at 2.4% Y/Y in the December MPR, but this is likely to be mechanically too high, given December inflation surprised two tenths to the downside at 2.0% Y/Y. As such, Bloomberg consensus sees CPIF ex-energy at 2.1% Y/Y.
- Consumption data for 2023 will once again be used to calculate 2025 basket weights (as in 2024), so analysts do not expect a large basket effect in January.
- Analysts generally expect start of year price resets in services (excluding rent) to be smaller than in 2024, while goods components are likely to see seasonal falls in prices.
- The Riksbank’s January meeting minutes continued to signal broad-based confidence in the inflation outlook. Deputy Governor Jansson and Governor Thedeen highlighted recent increases in producer prices as a risk to monitor, but that these developments do not yet change the assessment of monetary policy.
- As a result, we currently consider activity/labour market data and any US tariff developments to be a more important to the near-term Riksbank policy outlook.
- No details will be available in the flash release, with final CPI not due until Feb 18th. See below for a selection of analyst comments:
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US TSYS: Early SOFR/Treasury Option Roundup
Better SOFR & Treasury put option volume on net so far, SOFR more two-way as early underlying support reversed after Trump denied tempered tariff story by the Washington Post. Tsy options see huge Mar'25 10Y put buying. Projected rate cuts through mid-2025 look weaker vs. late Friday levels (*) as follows: Jan'25 at -2.3bp (-2.8bp), Mar'25 -11.8bp (-13.2bp), May'25 -16.8bp (-17.8bp), Jun'25 -25.8bp (-26.5bp).
- SOFR Options:
- -15,000 SFRZ5 95.25/95.75 2x1 put spds, 2.0 ref 96.02
- -3,000 2QH5 95.00/95.50 put spds 3.5 ref 95.98
- +6,000 0QZ5 97.00/98.00 call spds, 10.0 vs. 96.005/0.14%
- Block: 10,000 SFRU5 95.62/95.81 put spds 7.0 vs. 10,000 96.75/97.12 call spds, 4.5, 1.0 net package
- over 9,400 SFRH5 95.68 puts, 1.5 ref 95.82
- 2,000 SFRF5/SFRH5 95.87/96.00/96.06 broken call fly spd
- 2,000 SFRM5 97.00/98.00 call spds ref 95.935
- 4,000 SFRF5 95.75/95.81/95.87/95.93 put condors ref 95.80
- Treasury Options:
- over +100,000 (50k blocked) TYH5 106 puts, 14 ref 108-18.5
- 6,000 TYG5 106 puts, 2
- 4,500 TYG5 109.5 calls, 15 ref 108-17
- 2,250 TYG5 104 puts ref 108-15.5
- 4,700 TYH5 108 puts, 50 ref 108-15
US TSY FUTURES: Curves Extend Bear Steepener Move
- Tsy curves climbing to new multi-year highs with bonds extending lows (USH5 -23 at 112-26, 30Y yield +.0413 at 4.8523%), 2s10s taps 35.520 - highest since May 2022, 5s30s +1.306 at 41.043.
- Heavy volumes in TYH5, over 935,000 so far amid heavy rate lock selling with over 20 corporate debt issuers expected today, not to mention Tsy supply: $84B 13W and $72B 26W bill auctions and $58B 3Y note auction (91282CMF5).
BOBL: Block trade
Bobl Block trade, suggest seller:
- OEH5 8.5k at 117.16.
