SWEDEN: Loan Growth Ticking Higher, But Savings Rate Will Determine GDP Impulse
- Swedish loan growth rose again in August. This should provide an impulse to the real economy going forward assuming household’s savings rates do not continue to rise.
- Household lending growth was 2.7% Y/Y in August, up from 2.6% in July for the highest since February 2023. Riksbank rate cuts (including Tuesday’s 25bp cut to 1.75%) impact household finances fairly quickly, as ~70% of mortgages are floating rate in Sweden.
- The key uncertainty for the Riksbank is whether lower housing costs will be reflected in higher real consumer spending outcomes (i.e. what is the marginal propensity to consume). Taken alongside the Government's household support packages in the 2026 budget, the central bank is optimistic that consumption can finally start durably increasing (2026 consumption forecast was revised up to 2.9% vs 2.7% prior in the September MPR).
- Non-financial corporation loan growth was 2.8% Y/Y (vs 2.7% prior), a two year high.
- Elsewhere, August input price data did not point to any serious upside risks to core goods or food CPIF inflation. Our preferred metric is the “price index for domestic supply”, which doesn’t include export price data.
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SILVER TECHS: Bullish Outlook
- RES 4: $41.064 - 1.764 proj of the Apr 7 - 25 - May 15 swing
- RES 3: $40.285 - 1.618 proj of the Apr 7 - 25 - May 15 swing
- RES 2: $40.000 - Psychological round number
- RES 1: $39.655 - 1.500 proj of the Apr 7 - 25 - May 15 swing
- PRICE: $38.700 @ 08:03 BST Aug 26
- SUP 1: $37.282/36.216 - 50-day EMA / Low Jul 31
- SUP 2: $35.285 - Low Jun 24
- SUP 3: $33.940 - 50.0% retracement of the Apr 7 - Jul 23 bull leg
- SUP 4: $32.958 - Low Jun 2
Trend signals in Silver are unchanged and remain bullish. Prices have recently recovered off support at the 50-day EMA, now at $37.282. A clear break of the average is needed to strengthen a short-term bearish threat and allow for a deeper retracement. This would open $35.285, the Jun 24 low. For bulls, the resumption of gains opens the next objective at $39.655 a Fibonacci projection.
BUNDS: OAT/Bund spread widest since April
- Continued widening in the OAT/Bund spread, 2.6bps wider, and at its highest level since April, following the French PM calling for a confidence vote on the 8th September.
- Next immediate resistance comes at the Psychological 80.00bps, which would be its widest since January.
The April high stands at 79.83bps.
(Chart source: MNI/Bloomberg Finance LP).
USDCAD TECHS: Bull Cycle Still In Play
- RES 4: 1.4111 High Apr 10
- RES 3: 1.4019 38.2% retracement of the Feb 3 - Jun 16 bear leg
- RES 2: 1.3968 High May 20
- RES 1: 1.3925 High Aug 22
- PRICE: 1.3858 @ 07:56 BST Aug 26
- SUP 1: 1.3803 20-day EMA
- SUP 2: 1.3775/22 50-day EMA / Low Aug 22
- SUP 3: 1.3576 Low Jul 23
- SUP 4: 1.3557/40 Low Jul 3 / Low Jun 16 and the bear trigger
Gains last week in USDCAD and the breach of resistance at 1.3879, the Aug 1 high, continues to highlight a bullish phase. Moving average studies have recently crossed and are in a bull-mode position, strengthening the current uptrend. An extension higher would signal scope for a climb towards 1.4019, a Fibonacci retracement. On the downside, support to watch lies at 1.3775, the 50-day EMA. A break of the EMA would signal a reversal.
