SWEDEN: Small Uptick In Inflation Expectations Won't Concern Riksbank
There was a minor uptick in Swedish CPIF expectations in January, but long-term expectations remain very close to the 2% target. The Riksbank will continue to focus more on actual inflation outcomes, growth data and the krona in determining its monetary policy stance. Consensus leans towards a rate cut in January, even as Governor Thedeen struck a cautious tone in a speech yesterday.
- 1-year ahead expectations amongst money market players were 1.8% in January (vs 1.7% in Dec).
- 2-year ahead expectations were steady ay 1.9%.
- 5-year ahead expectations ticked up to 2.1% (vs 2.0% in Dec).
- Note: The inflation expectations survey is now published by Origo Group (previously Kantar Prospera).
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USD: UK Data supports the Pound
- The Dollar was mostly on the front foot overnight and ahead of the European session, AUD and the Kiwi were the worst early performer within G10s, down 0.33% and 0.29% respectively.
- Since the Cash EU Govies and the UK Data beat, the AUD and NZD are still fairly unchanged, down 0.25% and 0.24% respectively, while the British Pound has jumped back in the Green, up 0.18%, back above 1.2700 in Cable following the UK Employment.
- Immediate resistance in GBPUSD is at 1.2713 20-day EMA.
EQUITY TECHS: E-MINI S&P: (H5) Bulls Remain In The Driver’s Seat
- RES 4: 6184.00 1.236 proj of the Aug 5 - Sep 3 - 9 price swing
- RES 3: 6200.00 Round number resistance
- RES 2: 6194.19 1.236 proj of the Aug 5 - Sep 3 - 9 price swing
- RES 1: 6178.75 High Dec 6 and the bull trigger
- PRICE: 6142.75 @ 07:24 GMT Dec 17
- SUP 1: 6103.12 20-day EMA
- SUP 2: 6043.00/6010.18 Low Nov 26 / 50-day EMA
- SUP 3: 5970.25 Low Nov 21
- SUP 4: 5921.00 Low Nov 19
The S&P E-Minis contract is unchanged. The outlook remains bullish and the latest shallow pullback is considered corrective. Recent gains confirmed a resumption of the uptrend. Note that moving average studies are in a bull-mode set-up, highlighting a dominant uptrend and positive market sentiment. A resumption of the trend would open 6194.19, a Fibonacci projection. Initial support to watch lies at 6103.12, the 20-day EMA.
BUNDS: Under early pressure
- A tight and light overnight trading session for Bund, the UK data beat was only worth an initial 5 ticks downside move for the German contract, and volumes remain fairly subdued in EGBs albeit at their session lows.
- While both Bund and Tnotes have seen some tight ranges, both contracts are still trading at interesting levels.
- Bund and the 2.263% retracement level has held Friday and yesterday, and given where the Future is, this will again be quoted below that level.
- As such the support is at 134.41, gap and Yield level, further out, opens to 134.24.
- US Tnotes is still probing the 4.40% as Desks look for a less Dovish longer end path from the Fed, as Trump takes over in 2025.
- Support is at 109.20 (TYH5), but most investors will look at 4.50% in Yield, today equates to 109.05.
- Today sees, German IFO/ZEW, and US Retail Sales/IP.
- SUPPLY: UK £3.75bn 2029 (equates to 16.3k Gilt) should have limited impact, US Sells $13bn of 20yr reopening.
- SPEAKERS: ECB Kazimir, Rehn.
