CHF: SocGen Like Buying USD/CHF Topside Convexity

Recent trade in the SFRM6/Z6/M7 fly saw ~3K given at -11.5.

The next Swedish National Debt Office (NDO) borrowing report is due on May 22nd. Updated fiscal projections and issuance announcements will need to incorporate any forecast errors since the November projection round and policy announcements in the Spring Budget Bill (presented in full on April 15th). This report may announce an increase in nominal SGB auction sizes from the current SEK5bln/auction.

• The Swedish March budget balance was -SEK4.6bln, in line with the NDO's November 2024 projection. That leaves the cumulative budget deficit since November at SEK63.2bln, versus SEK58.4bln expected. The March primary balance was -SEK6.3bln (vs -SEK5.5bln expected).
• In the last month, the Government has announced several expansionary measures to be included in the Spring Budget, including SEK5.8bln of spending to stimulate economic activity.
• In addition, the Government has announced SEK25bln in extra defense spending from 2025 (to be delivered during 2026-2028), and plans to increase defence spending in line with NATO’s new target (which may be between 3-4% GDP). If defence spending were to increase to 3.5% GDP by 2030, the Government expects to finance this through up to SEK300bln of additional borrowing by 2034.
• Finally, an additional SEK16bln in aid for Ukraine has been announced for 2025.
• The NDO will sell SEK2bln of the 1.75% Nov-33 SGB 1065 and SEK3bln of the 2.25% May-35 SGB 1066 at its auction this Wednesday.

Of note:

EURUSD 1.12bn at 1.1000.

USDJPY 1.76bn at 146.00.

USDCNY 1.06bn at 7.3500 (tue).

EURUSD 1.25bn at 1.1000 (fri).

• EURUSD: 1.1000 (1.12bn), 1.1055 (389mln), 1.1070 (404mln), 1.1100 (572mln).
• USDJPY: 145.00 (425mln), 146.00 (1.76bn), 146.50 (569mln).
• USDCAD: 1.4200 (444mln), 1.4270 (532mln).
• NZDUSD: 0.5610 (300mln).