SWEDEN: Softer-than-expected May Flash Inflation Keeps June Cut On Cards

• RES 4: $78.10 - High Jan 15  
• RES 3: $75.81 - High Feb 20
• RES 2: $74.63 - High Apr 2 and a bull trigger
• RES 1: $64.46/67.38 - 20- and 50-day EMA values           
• PRICE: $59.43 @ 06:44 BST May 5
• SUP 1: $58.00 -Low April 9 and the bear trigger     
• SUP 2: $56.29 - 2.236 proj of the Feb 20 - Mar 5 - Apr 2 price swing
• SUP 3: $55.10 - 2.382 proj of the Feb 20 - Mar 5 - Apr 2 price swing
• SUP 4: $54.00 - Round number support

A bearish theme in Brent futures remains intact and recent weakness reinforces current conditions. Last week’s price action confirms recent gains between Apr 9 - 23 as corrective that allowed an oversold condition to unwind. Sights are on $56.29 a Fibonacci projection. On the upside, key resistance to monitor is at the 50-day EMA, at $67.38. Initial resistance is at $64.46, the 20-day EMA.

Austria, Germany, France, Spain and Ireland all look to hold auctions this week. We pencil in estimated gross issuance for the week of E26.1bln, down from E35.0bln last week.

For the full document with a look ahead to the next two weeks of issuance, click here.

• This morning, Austria will look to hold an RAGB auction. On offer will be a combined E1.725bln of the on-the-run 10-year 2.95% Feb-35 RAGB (ISIN: AT0000A3HU25) alongside the 20-year 3.15% Jun-44 RAGB (ISIN: AT0000A0VRQ6)
• Also today, Germany will come to the market with E4.5bln of the 2.40% Apr-30 Bobl (ISIN: DE000BU25042) on offer.
• Tomorrow, France will look to hold a LT OAT auction (rather than on the usual Thursday due to the VE day public holiday). On offer will be a combined E10-12bln of the on-the-run 10-year .20% May-35 OAT (ISIN: FR001400X8V5), the 1.25% May-38 OAT (ISIN: FR0014009O62) and the 4.50% Apr-41 OAT (ISIN: FR0010773192).
• On Thursday, Spain will hold a Bono/Obli/ObliEi auction with a combined E5.5-6.5bln of conventionals on offer. On offer will be the 3-year on-the-run 2.40% May-28 Bono (ISIN: ES0000012O59), the on-the-run 5-year 2.70% Jan-30 Bono (ISIN: ES0000012O00) and the on-the-run 30-year 4.00% Oct-54 Obli (ISIN: ES0000012M93). Alongside these, E250-750mln nominal of the 1.00% Nov-30 Obli-Ei (ISIN: ES00000127C8) will be on offer.
• To conclude the week, also on Thursday, Ireland will look to hold an auction. Due to the public holiday on Monday, the details will be announced this morning.

NOMINAL FLOWS: This week sees a single redemption of E1.0bln from a formerly 5-year Lithuanian bond. Coupon payments for the week total E0.4bln. This leaves estimated net flows for the week at positive E24.8bln versus negative E0.9bln last week.

• RES 4: 94.75 76.4% of the Dec 3 ‘24 - Jan 13 bear leg (cont)   
• RES 3: 94.50 High Apr 7 and key resistance       
• RES 2: 94.00 Round number resistance
• RES 1: 93.93 High May 2                            
• PRICE: 93.17 @ Close May 2
• SUP 1: 92.65 20-day EMA                                      
• SUP 2: 91.73/91.43 Low Apr 17 / 15 
• SUP 3: 90.47/89.99 Low Apr 11 / 9     
• SUP 4: 89.68 Low Jan 15 (cont) 

A bull cycle in Gilt futures remains intact and short-term weakness is - for now - considered corrective. The cross has recently traded through 93.44, the 76.4% retracement of the Apr 7-9 sell-off. This strengthens the bull cycle and opens 94.50, the Apr 7 high and a key resistance. Initial resistance to monitor is 93.93, the May 2 high. On the downside, support to watch is 92.40, the 20-day EMA.