FOREX: New Record Highs for CHFJPY, Set to Extend Winning Streak

Several Swedish data points were released this morning. April activity data (retail sales, lending growth) appears to have been resilient despite the significant trade uncertainty stemming from the US liberation day announcement and fallout. Meanwhile, wage growth decelerated in line with the 2025 collective agreements. Overall, the data leans in favour of a cautious Riksbank on June 18, despite increasing expectations for a 25bp cut. The May inflation report (flash release on June 5) will be key in shaping consensus ahead of that decision. A reminder that the final Q1 GDP report is due on Friday.

• The recovery in retail sales extended in April, rising 0.9% M/M (vs an upwardly revised 0.7% prior). The median analyst projection was 0.2%. This sees 3m/3m growth tick up to 1.1%, from 0.8% in March and 2.0% in February. Retail sales continue to correlate closely with retail sentiment in the Economic Tendency Indicator.
• Household and corporate lending growth continued to rise in April. Household lending (the majority of which is mortgages) ticked up to 2.3% Y/Y (vs 2.1% prior), the highest since March 2023. Non-financial corporate lending growth was 1.5% Y/Y (vs 0.5% prior). That’s up from a low of -2.5% in July/August 2024.
• Whole economy wages eased to 3.4% Y/Y in March, from 3.8% in February. This is in line with the 2025 union wage agreement, which came into effect from April.
• The April goods trade surplus was SEK6.6bln (vs SEK11.2bln prior). In trend terms, the surplus rose for a sixth consecutive month to SEK8.2bln (vs SEK7.4bln prior). Exports to the US are only available as of March, but rose to the highest since September 2023 at SEK19.0bln – a possible sign of tariff frontloading. 

Latest block trades lodged at 07:45:00 NY/12:45:00 London:

• UXYU5 3.8K lots blocked at 112-041 vs. WNU5 1.8K lots blocked at 115-13.
• Prevailing levels and subsequent price action on the cash 10s30s curve points to a flattener.
• 10s30s last 50.2bp, -0.2bp on the day, vs. cycle closing highs at 52.2bp. lodged on Friday.
• DV01 ~$320K.

• The bid in EGBs and wider Bonds is led by the Italian BTP here, seems some order flow related move with over 7k lots trading within the last 8 minutes window.
• The outright contract targets Yesterday's high of 120.96, its highest level for the Year.
  The Italian 10yr Yield falls to the lowest level since February.
• The Price Action in Futures is pushing the BTP/Bund spread just over 1bp tighter, and could now eye the September 2021 low at 97.7bps, ahead of the 2021 low of 90.59bps.
• As per Bloomberg: "Barclays strategists lower their target for the BTP-bund spread to 70bps from 90bps, and forecast that yields of core and periphery European government bond markets are set to narrow further."

(Chart source: MNI/Bloomberg).