NORWAY: Retail Sales Momentum Remains Robust
May-28 13:17
Norwegian retail sales rose 0.7% M/M in April, above the three-analyst strong consensus of 0.4% and March’s 0.6%. Mainland activity data continues to portray an economy that is coping resiliently with interest rates at 4.50%, underscoring Norges Bank’s caution around the start of its easing cycle.
- Unless May unemployment (due Friday) and May inflation (due June 10) surprise notably in a dovish direction, Norges Bank will likely hold rates at 4.50% on June 19 and signal that the “policy rate will most likely be reduced in the course of 2025”.
- In April, 3m/3m retail sales ex motor vehicles rose 1.5% (vs 1.6% prior), while the measure ex-vehicles and fuel rose 1.3% (vs 1.5% prior).
- Retail sales growth is consistent with the more positive signals from the Q1 Regional Network Survey. The next survey is due on June 12.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
BONDS: Gilt/Bunds Stuck Around 200bp
Apr-28 13:10
The 10-Year gilt/Bund spread is unable to trade meaningfully lower after breaking below 200bp, with the early narrowing impetus fading after the spread based at ~198bp (last ~1bp tighter at ~200bp).
- Gilt bulls are trying to force the first close below 200bp since April 8.
- Looser German fiscal policy is weighed against the constrained UK public finance position, with the readthrough for broader global trade another factor that is impacting the spread.
- A more activist approach from the DMO re: the gilt remit has helped limit spread widening episodes in recent weeks, with the agency tilting issuance away from the long end.
- Initial support in the spread is located at the April 8 closing level (197.4bp), with the next major support below there at the April 3 close (184.3bp).
- Respect of the 4.460% yield level in 10-Year gilts has helped prevent further tightening in the spread.
ECB: Nothing Too Exciting From De Guindos
Apr-28 13:05
ECB Vice President De Guindos' speech here, presenting the ECB's 2024 Annual Report. Some highlights:
- Unsurprising: "Especially given current uncertainty, we will continue to follow a data-dependent and meeting-by-meeting approach to setting the appropriate monetary policy stance, and we are not pre-committing to a particular rate path."
- "Risks have intensified amid exceptional uncertainty, largely related to trade. Euro area exporters are now facing new barriers, and tensions in financial markets and geopolitical uncertainty will likely weigh on business investment. In this environment, consumers may become cautious about the future and hold back spending".
- "The recent trade policy upheaval has triggered the most significant financial market turmoil since the pandemic. While euro area banks’ valuations have also been affected, their fundamentals remain robust and they are well positioned to withstand potential shocks thanks to their sizeable capital and liquidity buffers".
- "Despite the resilience of our financial sector, these developments warrant careful monitoring. Sharp adjustments in financial markets could become disorderly, particularly if they are amplified by the growing size and influence of non-bank financial institutions".
STIR: Effective Fed Funds Rate
Apr-28 13:03
- FRBNY EFFR for prior session:
- Daily Effective Fed Funds Rate: 4.33% (+0.00), volume: $112B
- Daily Overnight Bank Funding Rate: 4.33% (+0.00), volume: $298B
- Repo Reference Rates from earlier
- Secured Overnight Financing Rate (SOFR): 4.33% (+0.04), volume: $2.565T
- Broad General Collateral Rate (BGCR): 4.32% (+0.04), volume: $1.055T
- Tri-Party General Collateral Rate (TCR): 4.32% (+0.04), volume: $1.023T
- (rate, volume levels reflect prior session)
