SWEDEN: Small Rise In 5-year CPIF Inflation Expectations Won't Concern Riksbank
Swedish long-term money market participant CPIF inflation expectations ticked up to 2.2% in October (vs 2.1% in September). This was the highest since April, but is unlikely to concern the Riksbank nor impact the policy path.
- At a two-year horizon, CPIF expectations ticked down to 1.9% (vs 2.0% in September).
- Meanwhile, one-year ahead expectations fell three tenths to 1.6%, equalling the November 2024 low. From the start of next year, the VAT rate on food will be temporarily halved to 6%. This is expected to mechanically pull down annual inflation rates, and is thus being reflected in inflation expectations.
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GOLD TECHS: Fresh Cycle High
- RES 4: $3783.2 - 1.618 proj of the Dec 30 ’24 - Apr 3 - 7 price swing
- RES 3: $3744.2 - 1.500 proj of the May 15 - Jun 16 - 30 price swing
- RES 2: $3705.2 - 1.382 proj of the May 15 - Jun 16 - 30 price swing
- RES 1: $3700.0 - Round number resistance
- PRICE: $3642.3 @ 07:20 BST Sep 15
- SUP 1: $3614.0 - Low Sep 11
- SUP 2: $3532.8 - 20-day EMA
- SUP 3: $3439.4 - 50-day EMA
- SUP 4: $3311.6 - Low Aug 20
Gold remains in a clear bull cycle and has started the week on a firmer note - yesterday the metal traded to a fresh all-time high, once again. The break higher confirms a resumption of the primary uptrend and an extension of the sequence of higher highs and higher lows. The next objective is the $3700.00 handle and $3705.2, a Fibonacci projection. Initial firm support lies at $3532.8, the 20-day EMA.
BUNDS: Supply is the early focus
- The German Bund trades within Yesterday's tight range with focus this Week on the US FOMC meeting.
- There's no change in terms of immediate Technical levels, the initial small resistance was seen Yesterday at 128.84, and the contract printed a 128.81 high.
- Above the latter would see the 129.13 Gap.
- To the downside, support was eyed at 128.51, and it printed a 128.53 low Yesterday.
- A push below that level, opens to 128.25 next.
- The UK Employment Data was pretty much inline, but Jobless claimant saw a big improved revision, still moves across assets have been very small, and the German 10yr still trades in a 15 ticks range.
- With the UK Data out of the way, the Italian CPI is final reading, won't move the needle, the German ZEW is also unlikely to be a major mover, focus will be on the US Retail Sales and IP.
- The Canadian CPI is also due for North America.
- SUPPLY: UK £3bn 15yr (equates to 33k Gilt) should weigh into the bidding deadline, Germany €4.5bn Bobl (equates to 28k Bobl) should weigh, Finland 2031, 2035 (won't impact Bund), US Sells $13bn of 20yr reopening.
- SPEAKERS: ECB Simkus, Escriva.
BRENT TECHS: (X5) Bear Threat Remains Present
- RES 4: $79.16 - 2.618 proj of the Apr 9 - 23 - May 5 price swing
- RES 3: $77.28 - 2.382 proj of the Apr 9 - 23 - May 5 price swing
- RES 2: $76.39 - High Jun 23 and a bull trigger
- RES 1: $69.53/71.93 - High Sep 2 / High Jul 30 and a key resistance
- PRICE: $67.62 @ 07:01 BST Sep 16
- SUP 1: $64.50 - Low Jun 30 and a key short-term support
- SUP 2: $60.82 - Low May 30
- SUP 3: $58.37 - Low May 5
- SUP 4: $57.81 - Low Apr 9 and a key support
Brent futures are unchanged and remain above their recent lows. Short-term gains are for now, considered corrective and a bear cycle remains intact. Sights are on $64.50, the Jun 30 low, where a clear break would confirm a continuation of the bear leg. This would open $60.82, the May 30 low. Key short-term resistance has been defined at $71.93, the Jul 30 high. Clearance of this level would cancel a bear theme.
