GERMAN DATA: NRW misses versus expectations for the national print

• The big question ahead of this week’s Riksbank meeting is whether there will be another hawkish central bank surprise. Every analyst preview that we have read and every respondent to the SEB investor survey expects a 25bp hike this week to 3.75%.
• We think there is a greater chance of a hawkish surprise than most analysts would suggest despite there having been two dissenters to the 50bp hike at the last meeting in April.
• A step up in the pace of QT is also expected. Most analysts expect an increase in pace from SEK3.5bln/month to somewhere between SEK5-6bln/month, while the median expectation in the SEB investor survey was for a SEK5.75bln/month pace.
• In terms of the rate profile, the median of the analyst previews we have read look for a peak around 3.85-3.90%. However, an increasing number of analysts look for a further 25bp hike in September, in order to keep up to some extent with the ECB and to support the krona.

• RES 4: 146.12 76.4% Oct-Jan Downleg
• RES 3: 145.04 2.0% 10-dma envelope
• RES 2: 144.40 1.382 proj of the Jan 16 - Mar 8 - Mar 24 price swing
• RES 1: 144.17 High Jun 27
• PRICE: 143.92 @ 06:23 BST Jun 28
• SUP 1: 141.84 Former bull channel top drawn from the Jan 16 high
• SUP 2: 141.21/22 Low Jun 20 / 20-day EMA
• SUP 3: 139.85 Low Jun 16
• SUP 4: 138.85 50-day EMA

Another bullish session in USDJPY yesterday and the pair touched a new multi-month high. The pair is approaching 144.40 - the 1.382 projection of the Jan 16 - Mar 8 - Mar 24 price swing and 145.04 further out, resistance at the 2.0% 10-dma envelope. Technically, USDJPY is now the most overbought (as per the 14-day RSI) since mid-October. Key short-term support is at 141.22 the 20-day EMA. A break would suggest scope for a deeper correction.