SCANDIS: NOKSEK Holds Above Support Following Early Scandi Data
Little net reaction in NOKSEK to this morning’s Scandi data. The cross remains at ~0.9230, above support at the 0.9200 figure. Yesterday’s impressive SEK strength saw the cross breakdown notably, reinforcing our view that risks are still skewed to the downside.
- Norway November CPI-ATE inflation was a tenth below Norges Bank and analyst consensus at 3.1% Y/Y (vs 3.4% prior), but still within the 3.0-3.2% Y/Y range of estimates we had seen. Overall, this should make for a broadly neutral impact from spot inflation on the “prices and wages” component of the December MPR relative to September. Will follow up with details in due course.
- The prices and wages rate path component may be impacted to a greater extent by tomorrow’s Q4 Regional Network Survey, which includes wage expectations and capacity utilization estimates.
- Swedish October GDP was -0.3% M/M (vs -0.1% prior). The four analyst estimates submitted to Bloomberg ranged from -0.8% to 0.4%. Both household consumption and private sector production fell on the month, but we don’t take much signal from one set of (volatile, revision prone) monthly data. Other economic activity signals have been improving in recent months.
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NORWAY: CPI-ATE 4 tenths above consensus, 2 tenths above Norges Bank's forecast
That upside surprise of 0.4ppt to consensus for CPI-ATE leaves us 0.2ppt above the Norges Bank's latest forecast.
- Initial reaction has seen EURNOK move from around 11.723 pre-data to hit a low of 11.707.
- We had noted following last week's Norges Bank meeting that a December cut seemed very unlikely at this stage, and the prospects of that are likely to fall back even further.
- It appears as though the upside pressure is concentrated across "furnishings, household equipment and route maintenance", "clothing and footwear" and "recreation and culture" at first glance.
BTP TECHS: (Z5) Unwinding An Overbought Trend Condition
- RES 4: 123.14 1.764 proj of the Sep 3 - 11 - 25 price swing
- RES 3: 122.81 1.618 proj of the Sep 3 - 11 - 25 price swing
- RES 2: 122.53 1.500 proj of the Sep 3 - 11 - 25 price swing
- RES 1: 121.94 High Oct 17 / 22 and the bull trigger
- PRICE: 121.02 @ Close Nov 7
- SUP 1: 120.74 High Aug 5 and a recent breakout level
- SUP 2: 120.60 50-day EMA
- SUP 3: 120.13 Low Oct 10
- SUP 4: 119.48 Low Oct 7
The trend set-up in BTP futures remains bullish and recent weakness - for now - appears corrective. Note the moving average studies are in a bull-mode position, highlighting a dominant uptrend. The bull trigger is 121.94, the Oct 17 / 24 high. Initial firm support to watch is 120.74, the Aug 5 high. The contract is overbought, a deeper retracement would allow this condition to unwind.
RATINGS: Greece Gets +ve Outlook At Scope, -ve Outlook Tweak For Poland At DBRS
Sovereign rating reviews of note from after hours on Friday include:
- Fitch affirmed Ireland at AA; Outlook Stable
- Fitch affirmed Latvia at A-; Outlook Stable
- S&P affirmed Poland at A-; Outlook Stable
- Morningstar DBRS confirmed Poland at A, Trend changed to Negative
- Scope Ratings affirmed Greece at BBB; Outlook revised to Positive
