RIKSBANK: MNI Riksbank Review: May '25 - Dovish Bias, But No Promises
May-08 13:45
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EXECUTIVE SUMMARY:
- The Riksbank held rates at 2.25% as unanimously expected, and introduced a very slight dovish tilt to its guidance. The policy statement noted that “it is somewhat more probable that inflation will be lower than that it will be higher than in the March forecast. This could suggest a slight easing of monetary policy going forward”.
- We had expected a dovish guidance tweak in our preview, but overall view the May decision as fairly non-committal.
- In the press conference, Governor Thedeen suggested that the dovish alternative scenario presented in the March MPR is somewhat more likely to play out than the hawkish scenario, but was “not at all certain” of another rate cut. Thedeen stated that the wording in the policy statement was intentionally vague.
- There was limited reaction in SEK crosses to the decision, with the signal provided not enough to move markets that already price in ~40bps of additional policy easing this year.
- We continue to view a June cut as in play, but such a move will be determined by the hard and soft data between now and June 18.
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US 10YR FUTURE TECHS: (M5) Testing Support
Apr-08 13:45
- RES 4: 115-00+ High Oct 1 ‘24
- RES 3: 114-29+ 2.000 proj of the Jan 13 - Feb 7 - Feb 12 price swing
- RES 2: 114-16 2.000 proj of the Jan 13 - Feb 7 - Feb 12 price swing
- RES 1: 112-29/114-10 50.0% of Apr 7 high-low range / High Apr 7
- PRICE: 1111-12 @ 14:34 BST Apr 8
- SUP 1: 111-10+/110-08 20-day EMA
- SUP 2: 111-10+ 20-day EMA
- SUP 3: 110-20+ 50-day EMA
- SUP 4: 110-06 Low Mar 27
The strong sell-off from yesterday’s high in Treasury futures is considered corrective - for now - and this is allowing an overbought condition to unwind. Recent gains resulted in the break of resistance at 112-01, the Mar 4 high, to confirm a resumption of the uptrend. The move higher opens 114-16 next, a Fibonacci projection. On the downside, support at 111-10+, the 20-day EMA, has been pierced. A clear break of it would open 110-20+, the 50 day EMA
EQUITIES: Program buyer on the Open
Apr-08 13:44
- A program buyer went through on the Cash open with 1875 names, the most since 19th March.
- Despite the bid in Cash indices, futures are seeing selling interest since the open, ESM5 is sold in over 10k.
EURIBOR OPTIONS: Put spread buyer
Apr-08 13:40
ERK5 97.6875/97.8125ps, bought for 1.75 in 2k.
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