SWEDEN: Mixed January PES Labour Market Data, Won't Change Riksbank Outlook
Public Employment Service data for January was a little mixed, but doesn’t materially push back on Riksbank expectations for a stronger labour market this year. Although the unemployment claims rate remains on a downward trend, there was a fall in vacancies and a small rise in redundancy notices.
- The unemployment claims rate fell to a two-year low of 6.6%, now down from 7.1% in the middle of last year. This is expected to translate into a lower LFS unemployment rate in the coming months. The Riksbank projects the LFS rate to fall to 8.4% by December 2026 (vs 9.1% 3mma at present).
- Vacancies totalled 87.3k, down from 95.2k in December and 88.5k in November. This was also 13% below January 2025 levels. That saw the vacancies to unemployment claims ratio fall back to 0.25 (vs 0.27 in Dec, 0.25 in Nov).
- Total redundancy notices rose to 5.9k, bringing the 3mma up to 4.5k (vs 4.2k prior).
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EURJPY TECHS: Clears Resistance
- RES 4: 186.73 Bull channel top drawn from the Feb 28 low
- RES 3: 186.41 2.618 proj of the Jul 31 - Sep 29 - Oct 2 price swing
- RES 2: 185.77 2.500 proj of the Jul 31 - Sep 29 - Oct 2 price swing
- RES 1: 185.42 Intraday high
- PRICE: 185.36 @ 08:03 GMT Jan 13
- SUP 1: 183.32/182.64 20-day EMA / Low Jan 8
- SUP 2: 182.25 Low Dec 19
- SUP 3: 181.59 50-day EMA
- SUP 4: 180.50 Low Dec 8
The trend needle in EURJPY continues to point north. The cross has traded to a fresh cycle high, clearing resistance at 184.92, the Dec 22 high. The move higher confirms a recent bull flag on the daily chart and confirms a resumption of the uptrend. This signals scope for a climb towards 186.73, the top of a bull channel drawn from the Feb 28 low. Key support to watch lies at 181.59, the 50-day EMA.
STIR: Several Developments Needed For Markets To Expect Further ECB Easing
ECB-dated OIS price 3bps of easing through September 2026 - just over a 10% implied probability of another cut. For markets to sympathise with the idea of further easing, it would require (i) several downside core inflation surprises, (ii) an easing of compensation pressures and (iii) an abrupt reversal in recent activity momentum.
- Morgan Stanley continues to hold one of the most dovish ECB views – forecasting 2x25bp cuts this year to a 1.50% deposit rate terminal. Yesterday, they wrote that “a crucial waymark here is the May (around 20-May) release of euro area negotiated wages for 1Q26. We look for a figure below 3.0%Y. On the way to May, we will have two updates of the ECB wage ….and monthly releases from some national central banks and in particular Bundesbank …which should provide ample room to form expectations ahead of the May release. If we are right with our view, the ECB should have all the data it needs to restart rate cuts at the June meeting.”
- The April-June OIS spread is currently -1.5bps, flatter than any other OIS meeting gap. Meanwhile, the negative Apr-Jun-Jul and Jul-Sep-Oct OIS flies unsurprisingly indicate that if another cut is delivered, it will most likely be at a quarterly macroeconomic projection meeting.
- Moves in EGB markets are likely to set the tone for EUR STIRs today, with a light regional data calendar and only comments from Austrian National Bank Governor Kocher due.
| Meeting Date | ESTR ECB-Dated OIS (%) | Difference Vs. Current Effective ESTR Rate (bp) |
| Feb-26 | 1.934 | 0.3 |
| Mar-26 | 1.931 | 0.0 |
| Apr-26 | 1.926 | -0.6 |
| Jun-26 | 1.910 | -2.1 |
| Jul-26 | 1.907 | -2.4 |
| Sep-26 | 1.901 | -3.0 |
| Oct-26 | 1.909 | -2.2 |
| Dec-26 | 1.929 | -0.2 |
| Jan-27 | 1.944 | 1.3 |
| Source: MNI/Bloomberg Finance L.P. | ||
