SPAIN DATA: Labour Market Continues Firming Despite Headline Unemployment Uptick
Apr-26 10:56
The Spanish unemployment rate increased in Q1 2024, coming in at 12.29% (vs 11.92% cons; 11.76% in Q4). Employment meanwhile decreased by 139.7k to 21.3mln (vs -6.5k prior). However, looking at the seasonally-adjusted figures, the Spanish labour market seems to continue to firm.
- Looking at the details of the release, while the number of employed persons fell in all sectors in the first quarter (services -56.1k, industry -38.5k, agriculture -27.6k, construction -17.5k), these were largely regular seasonal falls, as seasonally-adjusted employment rose 0.54% in Q1 (vs +0.52% prior).
- Unemployment increased by 117.0k to 2.98m (vs +104.7k prior), with the uptick being broad-based across sectors, but also seasonally-driven (SA unemployment decreased 1.58%, the 14th consecutive decline, vs -2.39% prior).
- Looking ahead, data from INE's quarterly business confidence survey indicates the Spanish labour market is set to continue its recent strength: "13.1% of business establishments managers considers that employment, referring to personnel hired in their business, will increase in the second quarter of 2024, while 7.8% believe that it will decrease."
INE
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US TSYS: Midrange at Midweek
Mar-27 10:53
- Cash Treasuries running lower, yields near steady after a quiet overnight session, curves are steeper (2s10s +0.192 at -36.156). Quiet overnight session, month end extension trade absent as yet ahead of the early week close for the Easter holiday.
- Treasury futures trade mildly weaker, off recent lows as rates hold to a narrow overnight range: light volumes, the Jun'24 10Y (TYM4) contract is just over 200k, trades 110-19 last (-1.5) with initial technical support at 110-08+/109-24+ (Low Mar 21 / 18 and the bear trigger); resistance at 110-30.5 (Mar 21/22 high).
- Economic data limited to MBA Mortgage Applications at 0700ET, capped by revised Wholesale sales, inventories at 1000ET.
- Scheduled Fed-speak: Fed Governor Christopher Waller will discuss his economic outlook at an event hosted by the Economic Club NY this evening at 1800ET, text and Q&A is expected.
- US Treasury auctions continue with $28B 2Y FRN and $60B 17W Bills at 1130ET, $43B 7Y Notes (91282CJU6) at 1300ET.
- Short end SOFR futures mildly weaker while projected rate cut pricing continues to ebb: May 2024 at -13.9% w/ cumulative -3.5bp at 5.291%; June 2024 -63.1% w/ cumulative rate cut -19.3bp at 5.134%. July'24 cumulative at -29.6bp, Sep'24 cumulative -48.6bp at 4.841%.
RIKSBANK: Thedeen: 50% Chance Of May Rate Cut
Mar-27 10:53
The Riksbank’s press conference has concluded. EURSEK was generally little moved through the press conference, with Governor Thedeen’s comments generally in line with the policy statement/MPR communication. A few highlights:
- The new policy path indicates about a 50% chance of a rate cut in May.
- The Riksbank is happy to move before the Fed/ECB if its latest forecasts are met. However, he noted that this includes “all” forecasts, not just those for inflation.
- Favourable wage developments in Sweden (vs in Europe) may also allow for a move before the ECB.
- The long-term policy rate path (i.e. past the next three quarters) is more reflective of a general macroeconomic forecast, rather than an explicit rate forecast.
- While the recent rise in services inflation momentum has been concerning, the Riksbank still views the overall trend as declining.
OUTLOOK: Price Signal Summary - EUROSTOXX 50 Futures Head North
Mar-27 10:51
- In the equity space, the trend condition in S&P E-Minis is unchanged and remains bullish. Last week’s extension reinforces this theme and the break of 5257.25, Mar 8 high, confirmed a resumption of the uptrend. Note that moving average studies remain in a bull-mode position reflecting positive market sentiment. Sights are on 5407.23, the top of a bull channel drawn from the Jan 17 low. Initial firm support is 5218.00, the 20-day EMA. A move lower is considered corrective.
- A bullish trend condition in EUROSTOXX 50 futures remains intact and the contract has traded to fresh cycle highs this week. The climb once again confirms a resumption of the uptrend as the contract pulls away from the 5000.00 handle. Moving average studies remain in a bull-mode position, highlighting positive market sentiment. Sights are on 5074.7, the 1.236 projection of the Jan 17 - Feb 12 - 13 price swing. Initial firm support is at 4926.10, the 20-day EMA.
