FOREX: New Record Highs for CHFJPY, Set to Extend Winning Streak
Jun-27 12:22
- Despite a subdued session for global FX, softer-than-expected data in Japan Friday might be moderately weighing on the yen. While this dynamic may be merely stalling USDJPY’s reversal lower, progress for the likes of CHFJPY have been notable this week, and today’s 0.28% advance would extend the pair’s winning streak to seven consecutive sessions. CHFJPY has now rallied around 4% off the June lows to fresh record highs above the 181.00 handle.
- Tokyo’s core inflation slowed to 3.1% y/y in June from 3.6% in May, data from the Ministry of Internal Affairs and Communications showed Friday. The core-core CPI, which excludes both fresh food and energy and is a key indicator of underlying inflation, also eased to 3.1% y/y in June from 3.3% in May.
- Additionally, Japan’s retail sales fell 0.2% M/m in May, taking the annual rate to 2.2%, below the 2.5% estimate. Downside risks to the economy stemming from U.S. trade policies, highlighted in the Bank’s recent Outlook Report, are likely to delay any immediate policy tightening.
- For CHFJPY, today’s price action has narrowed the gap to the first notable projection level (from the Apr 25 - May 13 - May 23 price swing) at 181.35. Above here, the next objective is seen at 182.32.
- It is worth noting that Switzerland inflation is scheduled next Thursday. UBS expect headline CPI to remain unchanged at -0.1% Y/Y - but see some upside risks on the back of a rise in energy inflation to -7.6%.
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SWEDEN: This Morning's Data Releases Lean Hawkish
May-28 12:14
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.
US TSY FUTURES: UXY/WN Flattener Blocked
May-28 12:14
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.
BONDS: Italian BTP Futures is Leading broader Bonds higher
May-28 12:13
- 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).
