SWEDEN: Pipeline Pressures Were Weak In May
Swedish PPI fell 2.8% Y/Y (vs -2.4% prior) in May, while the price index for domestic supply (which combined domestic producer prices and input prices) saw a larger -3.4% Y/Y (vs -2.6% prior) print. Excluding energy, domestic supply prices fell on a sequential basis for the fourth consecutive month, pulling the annual rate down to -2.2% Y/Y (vs 4.7% prior). The data suggests there are downside risks to core goods and food CPI going forward, which underscores the Riksbank’s dovish stance at last week’s rate decision.
- All major domestic supply product categories fell on a monthly basis in May. On a 3m/3m basis, domestic supply inflation excluding energy was -1.8% (vs -1.0% prior), the weakest since September 2020.
- Capital goods inflation was -1.9% Y/Y (vs -0.2% prior), while consumer goods ex-food was -2.2% Y/Y (vs 0.2% prior). Food supply inflation eased to 3.9% Y/Y (vs 5.4% prior), the lowest rate since October 2024.
- Energy inflation was -10.0% Y/Y (vs -15.9% prior), with higher electricity prices offset by weaker oil and refined petroleum prices. There may be some upside risk to this component in June following the Middle East-induced commodity volatility.
- The SEK strengthened against the EUR and USD in May, which also will have weighed on imported input prices.
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COMMODITIES: Recovery for WTI Futures Since Apr 9 Still Appears Corrective
WTI futures traded to a fresh S/T cycle high last Wednesday before finding resistance. The recovery since Apr 9, appears corrective. Key resistance to watch is $62.63, the 50-day EMA. It has been pierced, a clear break of it would highlight a stronger reversal and open $65.82, Apr 4 high. For bears a reversal lower would refocus attention on $54.33, the Apr 9 low and bear trigger. The price pattern on May 21 is a shooting star - a bearish signal. Recent gains in Gold signals the end of the corrective phase between Apr 22 - May 15. Medium-term trend signals are unchanged, they remain bullish. Note that moving average studies are in a bull-mode position, highlighting a dominant uptrend. A continuation higher would open $3435.6 next, the May 7 high. Key support and the bear trigger has been defined at $3121.0, the May 15 low.
- WTI Crude up $0.08 or +0.13% at $60.97
- Natural Gas up $0 or +0.03% at $3.399
- Gold spot up $19.51 or +0.59% at $3320.93
- Copper up $1.65 or +0.35% at $475.65
- Silver up $0.08 or +0.24% at $33.3368
- Platinum up $6.69 or +0.62% at $1092.23
EQUITIES: MA Studies for Eurostoxx 50 Futures Remain in a Bull-Mode Position
The trend cycle in Eurostoxx 50 futures remains bullish and the recent pullback appears corrective. Moving average studies are in a bull-mode position, highlighting a clear uptrend and recent gains maintain the sequence of higher highs and higher lows. Sights are on 5516.00, the Mar 3 high and the key bull trigger. Key support to watch lies at 5238.48, the 50-day EMA. Clearance of this average would signal a possible reversal. A bullish trend condition in S&P E-Minis remains intact and the latest pullback appears to have been a correction. Last Friday’s sell-off resulted in a print below the 20-day EMA, at 5794.26. A key support lies at 5728.00, the 50-day EMA. A clear break of this average is required to highlight a stronger reversal and signal scope for a deeper retracement. Sights are on the bull trigger at 5993.50, the May 20 high.
- Japan's NIKKEI closed lower by 1.71 pts or 0% at 37722.4 and the TOPIX ended 0.02 pts higher or +0% at 2769.51.
- Elsewhere, in China the SHANGHAI closed lower by 0.755 pts or -0.02% at 3339.932 and the HANG SENG ended 123.68 pts lower or -0.53% at 23258.31.
- Across Europe, Germany's DAX trades higher by 20.81 pts or +0.09% at 24247.31, FTSE 100 higher by 19.95 pts or +0.23% at 8797.49, CAC 40 up 12.57 pts or +0.16% at 7839.18 and Euro Stoxx 50 down 0.01 pts or 0% at 5415.1.
- Dow Jones mini down 72 pts or -0.17% at 42338, S&P 500 mini down 9 pts or -0.15% at 5925, NASDAQ mini down 27.5 pts or -0.13% at 21433.5.
GERMAN DATA: Mixed Signals In Latest Labour Market Data
Latest German labour market data was mixed - employment continues its stabilization but unemployment ticked up considerably, with the employment agency looking for further layoffs. The IFO employment barometer remains contractionary but is on 10-month highs.
- Unemployment rose noticeably more than expected, by the quickest pace since July 2022 (34k vs 12k cons, 6k Apr) on a seasonally-adjusted basis. The unemployment rate meanwhile remained at 6.3% for the third consecutive month, as expected.
- The expected number of employees impacted by 'Kurzarbeit' (which has to be reported in advance by companies and can be interpreted as an early indicator for future use of state benefits) was little changed in May at around 46k.
- New vacancies reversed their April jump in May, printing at 114k, the lowest since the pandemic. Overall vacancies continue their longer-term downtrend in place since 2022.
- Employment was unchanged in April, meanwhile (lined out in previous bullet).
- Recall the IFO employment index jumped to 95.2 in May, a 10-month high - IFO sees a slower pace of job cuts ahead, especially in industry (manufacturing employment decreased 0.64% Q/Q, worst rate since Q2'20).
