NORWAY: Some Net Dovish Elements In Sep LFS Data; But Not a Gamechanger For NB
The Norwegian September LFS data had some net dovish elements, but won’t be a game changer for Norges Bank. On a month-to-month basis, the survey can exhibit quite a lot of volatility. Norges Bank more closely tracks NAV’s registered unemployment series as a gauge of labour market conditions. The October NAV data is due next Friday.
- The LFS trend unemployment rate was steady at 4.7% for the third consecutive month, consolidating the rise seen in the first half of this year.
- On a seasonally adjusted single-month basis, the unemployment rate eased a tenth to 4.8%, bringing the 3mma down to 4.7% from 5.0% in August.
- Employment trends were weak, falling 1.4% M/M (after +0.6% in August). On a 3m/3m basis, employment growth was negative for the first month in four (-0.2% vs 0.6% prior).
- LFS wage data is volatile, and we prefer national accounts data to gauge underlying trends. That said, preliminary average remuneration in cash growth for September fell to 4.3% Y/Y (vs 4.5% prior), the lowest since December. However, final readings for June – August were all revised up relative to the preliminary reads.
- Norges Bank projected 2025 annual wage growth at 4.7% in the September MPR (revised up from 4.5% in the June MPR). A faster-than-expected deceleration in compensation pressures could pave the way for a more aggressive pace of monetary easing next year. The current rate path is consistent with just one cut in each of 2026, 2027 and 2028.
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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: $66.15 @ 07:10 BST Sep 23
- 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 remain above the Sep 5 low. Recent 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 is required to cancel a bear theme.
EURJPY TECHS: Bullish Trend Condition
- RES 4: 177.08 2.000 proj of the Feb 28 - Mar 18 - Apr 7 price swing
- RES 3: 175.43 High Jul 11 ‘24 and a key medium-term resistance
- RES 2: 174.86 1.764 proj of the Feb 28 - Mar 18 - Apr 7 price swing
- RES 1: 174.50 High Sep 19
- PRICE: 174.28 @ 07:16 BST Sep 23
- SUP 1: 173.14/171.93 20- and 50-day EMA
- SUP 2: 170.97 Low Aug 14
- SUP 3: 169.73/45 Low Jul 31 / 23.6% of the Feb 28 - Jul 28 bull leg
- SUP 4: 168.46 Low Jul 1
The trend set-up in EURJPY is unchanged, it remains bullish and price is trading at its recent highs. The cross last week breached resistance at 173.97, the Jul 28 high and a bull trigger. This confirms a resumption of the medium-term uptrend and maintains the price sequence of higher highs and higher lows. Sights are on 174.86, a Fibonacci projection. On the downside, first support to watch lies at 173.14, the 20-day EMA.
BUNDS: A very Busy Day ahead - PMIs, Supply and Speakers
- This was one of lightest trading session for Bund overnight and in an extremely tight 6 ticks range.
- Even Rates (Euribor), the strip was seeing under 1k lots, as the street wait on the Prelim PMIs from Europe, UK, US and Speakers, including Fed Powell.
- One of the Main focus throughout this Week is on the Fed speakers given the splits in the last FOMC meeting.
- Initial support for Bund was seen at 128.04, this held Yesterday after printing a 128.01 low.
- Below the latter, opens to 127.61.
- Some desks might look at Yesterday's high of 128.41 for the first resistance, but better will now be seen towards 128.82, followed by the 129.13 gap, tested that level to the tick during the last FOMC meeting.
- As mentioned, PMIs and Fed Speakers will be at the forefront for Today's session, but supply will also be in play.
- SUPPLY: Netherlands €5bn 2056, UK £1.5bn 2056 (equates to 24.9k Gilt) could weigh, German €4.5bn Schatz (equates to 42k Schatz) should weigh into the bidding deadline, and US sells $69bn of 2yr Notes.
- SYNDICATION: Portugal 8yr Benchmark/€2054 Tap.
- SPEAKERS: ECB Muller, Kocher, Cipollone, BoE Pill, Fed Goolsbee (x2), Bowman, Bostic, and of course Powell.
