SWEDEN: Labour Market Data Improving Alongside Activity Trends
This morning’s November Public Employment Service (PES) labour market data was encouraging. It suggests the ongoing recovery in activity data is starting to be reflected in the labour market. Although muted inflation pressures (as noted earlier) may temper some of the recent hawkish repricing in SEK rates, stronger growth and labour market outcomes suggest the probability of a Riksbank hike is still greater than the probability of another cut over a 6–12-month horizon.
- The PES unemployment claims rate eased to an eighteen-month low of 6.73%. This suggests the LFS unemployment rate (November data are due tomorrow) will also start to fall in the coming months, as projected by the Riksbank.
- Total vacancies ticked up to 89k (vs 88k prior) and are now down just 1% Y/Y. Vacancies had been down 24% Y/Y in May.
- That helped the vacancies to unemployed claims ratio stabilise at 0.25, continuing its slow ascent from a cycle low of 0.20.
- The number of redundancy notices also pulled back in single-month and 3mma terms.
- One small area of concern that may be worth watching in the coming months is long-term unemployment. The proportion of claimants who have been unemployed for 12-24 months ticked up 1pp to 20%, the highest since April 22. Long-term unemployment can lead to inefficiencies in job search/matching markets and restrict potential output.
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AUDUSD TECHS: Bear Threat Remains Present
- RES 4: 0.6707 High Sep 17 and a bull trigger
- RES 3: 0.6661 2.0% 10-dma Envelope
- RES 2: 0.6644 76.4% retracement of the Sep-Oct bear leg
- RES 1: 0.6537/0.6618 50-day EMA / High Oct 29
- PRICE: 0.6520 @ 08:01 GMT Nov 11
- SUP 1: 0.6459 Low Nov 5
- SUP 2: 0.6440 Low Oct 14 and key support
- SUP 3: 0.6415 Low Aug 21 / 22 and a bear trigger
- SUP 4: 0.6373 Low Jun 23
Despite yesterday’s recovery - a correction - a bearish short-term tone in AUDUSD remains intact. The recent breach of the 50-day EMA undermines a bullish theme. This has exposed the next key support at 0.6440, the Oct 14 low. Key resistance and a short-term bull trigger is at 0.6618, the Oct 29 high. Initial resistance to monitor is at 0.6537, the 50-day EMA. It has been pierced, a clear break of the average would strengthen a bullish case.
GILTS: Opening Calls
Calls are now towards 93.43/93.55 following the UK Data coming below expectations.
EURJPY TECHS: Bullish Outlook
- RES 4: 180.37 1.500 proj of the Jul 31 - Sep 29 - Oct 2 price swing
- RES 3: 180.00 Psychological round number
- RES 2: 178.94 1.236 proj of the Jul 31 - Sep 29 - Oct 2 price swing
- RES 1: 178.82 High Oct 30 and the bull trigger
- PRICE: 178.23 @ 07:56 GMT Nov 11
- SUP 1: 175.40 50-day EMA
- SUP 2: 174.82 Low Oct 17
- SUP 3: 173.92 Low Oct 6 and a gap high on the daily chart
- SUP 4: 173.88 Bull channel support drawn from the Feb 28 low
The trend in EURJPY remains bullish and a price sequence of higher highs and higher lows is intact. Note that moving average studies are in a bull-mode position too, highlighting a dominant uptrend. Recent gains signal scope for 178.94 next, a 1.236 projection of the Jul 31 - Sep 29 - Oct 2 price swing. Support to watch lies at the 50-day EMA, at 175.40. A clear break of this EMA would signal scope for a deeper retracement.
