SWEDEN: Smaller “Black Week” Sales and Electricity Surge Biased CPIF Higher
Swedish November CPIF ex-energy confirmed flash estimates at 2.4% Y/Y, four tenths above the Riksbank’s September MPR projection. There were clearly seasonal/one-off factors at play in November, which should allow the Riksbank to look through the release at the December meeting (where a 25bps cut is expected). However, the recent uptick in inflation (and inflation momentum) may contribute to a slightly more cautious Riksbank stance heading into 2025.
- As anticipated by some analysts following the flash release, the negative impact of “Black week” sales on the prices of some goods and services was less than in November 2023, pushing annual rates higher. As in Norway, the later timing of Black Friday in 2024 (relative to 2023) may have also upwardly biased the prices collected for the CPI.
- Clothing and footwear prices rose 0.2% M/M, compared to a -1.2% M/M print last year. This helped the annual rate pick up to 3.7% Y/Y (vs 2.3% prior).
- Furnishings and household equipment and recreation and culture also saw smaller price falls in November 2024 relative to a year ago.
- Note that the weaker SEK through October 2024 may have also fed through into higher prices last month.
- Headline CPIF was 1.8% Y/Y (vs 1.849% unrounded, hence the downward revision vs the 1.9% flash). This was largely due to a 22.4% M/M rise in electricity prices, which had not been accounted for in the Riksbank’s September MPR projection (of 0.9% Y/Y).
- Food prices rose again, bringing the annual rate to 1.9% Y/Y (vs 1.7% prior).
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STIR: 125bp Of Cuts Priced Over Next 5 ECB Decisions
Little net movement in EUR STIRs since settlement, with no major spill over from the recently released UK labour market data.
- ECB-dated OIS broadly in line with pricing seen this time yesterday, showing 29.5bp of cuts for December 62bp of cuts through January, 92bp of cuts through March and just under 125bp of cuts through June.
- That means the market is essentially fully pricing 5x 25bp cuts over the next 5 meetings, albeit with risks of a 50bp move evident in pricing covering the next 3 decisions.
- Euribor futures flat to -1.0.
- Final German CPI data matched preliminary estimates.
- German ZEW data due today, providing the first sentiment reading since the German government breakdown.
- ECB speak will come from Rehn, Centeno, Holzmann and Cipollone, with Rehn looking the most likely to touch on ECB monetary policy matters. The others may not cover the Bank’s policy path and matters surrounding it, given the topics of their respective addresses.
ECB Meeting | €STR ECB-Dated OIS (%) | Difference Vs. Current Effective €STR Rate (bp) |
Dec-24 | 2.866 | -29.6 |
Jan-25 | 2.540 | -62.2 |
Mar-25 | 2.241 | -92.1 |
Apr-25 | 2.056 | -110.6 |
Jun-25 | 1.919 | -124.3 |
Jul-25 | 1.849 | -131.3 |
Sep-25 | 1.794 | -136.8 |
Oct-25 | 1.770 | -139.2 |
BTP TECHS: (Z4) Short-Term Bounce Extends
- RES 4: 123.12 3.382 proj of the Jun 11 - 18 - Jul 1 price swing
- RES 3: 122.78 3.236 proj of the Jun 11 - 18 - Jul 1 price swing
- RES 2: 121.53/122.62 High Oct 25 / 1 and the bull trigger
- RES 1: 120.15 50-day EMA
- PRICE: 120.06 @ Close Nov 11
- SUP 1: 117.88 Low Nov 7
- SUP 2: 117.70 61.8% retracement of the Jun 11 - Oct 1 bull cycle
- SUP 3: 117.34 Low Jul 26
- SUP 4: 116.54 76.4% retracement of the Jun 11 - Oct 1 bull cycle
BTP futures continue to find support and the contract traded higher again, Monday. Despite the bounce, the contract maintains a bearish tone. Price traded lower last week strengthening a bearish threat. A resumption of the downtrend would refocus attention on 117.70, a Fibonacci retracement point. Resistance to watch is 120.15, the 50-day EMA. A clear break of the average would cancel the bearish threat.
EURJPY TECHS: Pierces Support At The 50-Day EMA
- RES 4: 169.20 High Jul 24
- RES 3: 168.01 High Jul 26
- RES 2: 167.40 61.8% retracement of the Nov 11 - Aug 5 bear leg
- RES 1: 165.43/166.69 High Nov 8 / High Oct 31 and the bull trigger
- PRICE: 163.52 @ 07:08 GMT Nov 12
- SUP 1: 163.37/21 50-day EMA / Low Nov 8
- SUP 2: 161.85/161.01 Low Oct 17 / Low Oct 4
- SUP 3: 158.11 Low Sep 30
- SUP 4: 157.05/155.15 Low Sep 18 / 16
A bullish theme in EURJPY remains intact, however for now, a corrective cycle dominates and the cross is trading at its recent lows. The 50-day EMA lies at 163.37. It has been pierced. A clear break of it would signal scope for a deeper retracement and expose 161.85, the Oct 17 low. Moving average studies are in a bull-mode set-up and recent gains suggest scope for a climb towards 167.40, a Fibonacci retracement point.
