SWEDEN: Markets Discouting Strong Services PMI
The Swedish services PMI surged to 54.6 in June, above May’s 50.9 for the highest since late-2022. The print comes in sharp contrast to the services sentiment series in the June Economic Tendency Indicator (ETI), which slipped to 92.9 (vs 95.5 prior). We are more inclined to focus on the signals from the ETI than the PMI, with the latter more volatile and less closely followed by the Riksbank. Markets seem to agree, with SEK once again underperforming the G10 despite the data. EURSEK is up another 0.3% today, testing yesterday's 11.2677 high.
- The June PMI saw production spike 10 points to 57.6 (vs 47.6 prior), while new orders also rose to 59.5 (vs 56.5 prior). Meanwhile, employment fell to 43.4 (vs 46.8 prior).
- Supplier input prices rose slightly to 53.5 (vs 51.5 prior). This series fell notably between March and May, again conflicting the signals from the ETI.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
SOFR OPTIONS: 0QM5 96.375/125 Put Spread Blocked
Latest block trade lodged at 08:20:25 London/03:20:25 NY:
- 0QM5 96.375/125 put spread 5K blocked at 2, looks like a buyer.
NETHERLANDS: Wilders Pulls PVV Out Of Coaltion Amid Asylum Rule Row
Dutch broadcaster NOS reports that Geert Wilders, leader of the right-wing nationalist Party for Freedom (PVV) has withdrawn from the coalition, collapsing the four-party gov't. Following late-night and early-morning discussions, in which Wilders demanded stricter asylum rules, Wilders posted on X: "No signature for our asylum plans. No adjustment to the Main Outlines Agreement. PVV leaves the coalition." As MNI noted in May, the coalition has been riven with divisions for some time (see 'NETHERLANDS: Pension Reform Amendment Split Risks Coalition Instability', 20 May). Last week, Wilders blindsided the other governing parties with the 10-point agreement that would sit on top of the coalition agreement (which took five months to negotiate).
- The move is an extremely risky one for Wilders. After recording a surge in popularity in late-2023/ealry-2024 after joining gov't for the first time, the party's support has declined amid the inevitable policy compromises that take place in multi-party Dutch gov'ts. This stands in contrast to the recovering fortunes of three moderate parties, the conservative pro-business People's Party for Freedom and Democracy (VVD) that also sits as part of the gov't, the centre-left/environmentalist GreenLeft-Labour (GL-PvdA), and the centre-right Christian Democratic Appeal (CDA).
- Collapsing the gov't risks either protracted coalition negotiations or the dissolution of the House of Representatives and snap elections. With the newer, populist parties that the PVV governed with - the anti-graft New Social Coalition (NSC) and agrarian Farmer-Citizen Movement (BBB) - having fallen into political obscurity the PVV could find itself short of coalition options after any snap election.
- The timing of the collapse of the gov't is inopportune for the western defensive alliance, NATO. The annual NATO summit is being hosted by the Dutch gov't at The Hague on 24-25 June.
Chart 1. General Election Opinion Polling, % and 4-Poll Moving Average
Source: Peil.nl, Verian, Ipsos I&O, MNI
BONDS: EUREX ROLL PACE
- These were very active Yesterday, expect for the pace to continue since we have US NFP on Expiry day Friday, Traders will look to be all but done before that.
- For the Buxl, 72% of the front Month Volume is spread related, Bund 46%, Bobl 42%, and Schatz 71%.
Pace completion:
- Buxl: 48%.
- Bund: 33%.
- Bobl: 37%.
- Schatz: 48%.
- BTP: 35%.
- BTS: 30%.
- OAT: 34%.
