EM CEEMEA CREDIT: South Africa (SOAF): Q4 BER Inflation Expectations

•  RES 4: 7000.00 Psychological round number 
• RES 3: 6993.12 3.500 proj of the Aug 20 - 28 - Sep 2 price swing
• RES 2: 6974.04 3.382 proj of the Aug 20 - 28 - Sep 2 price swing 
• RES 1: 6909.50/6953.75 High Nov 3 / High Oct 30 and bull trigger  
• PRICE: 6892.00 @ 07:24 GMT Nov 12
• SUP 1: 6808.31/6655.70 20-day EMA / Low Nov 7 & key S/T support 
• SUP 2: 6571.25 Low Oct 17
• SUP 3: 6540.25 Low Oct 10 and a key support 
• SUP 4: 6476.62 23.6% retracement of the Apr 7 - Oct 30 bull cycle  

The trend condition in S&P E-Minis remains bullish and the bear leg since the Oct 30 high appears to have been a correction. The contract has managed to find support below the 50-day EMA, currently at 6722.19, and a key level. Activity on Nov 7 highlights a potential reversal signal - a bullish doji candle. This defines key support at 6655.50, the Oct 7 low. Sights are on 6953.75, Oct 30 high and bull trigger.

The Swedish labour market is showing signs of improvement, according to Public Employment Service data for October. This shouldn’t impact the Riksbank outlook – it’s rather confirming that the current policy stance is supporting the economic recovery. The policy rate is expected to remain at 1.75% for “some time”. However, we continue to think that the risk of a hike back to 2% is greater than the risk of another cut over a 12-month horizon.  

• The unemployment claims rate fell a tenth to 6.8%, the lowest since July 2024. Meanwhile, vacancies ticked up slightly relative to September (89k vs 87k prior), allowing the vacancies to unemployment claims ratio to rise to 0.25, a nine-month high.
• That said, the aggregate number of vacancies is still down 7% Y/Y (vs -6% Y/Y prior).
• Although the number of redundancy notices rose a little in October, the 3mma still fell for the third consecutive month to 4.5k (vs 4.8k prior).
• In yesterday’s November meeting minutes, First Deputy Governor Bunge said that “If confidence among households is to continue rising and the recovery is to begin in earnest, I think it is important that the labour market also develops in line with our expectations”… “There, the signals are rather more mixed, with indicators pointing in different directions. I think it is understandable that companies have taken a cautious stance with regard to recruitment after a long period of weak economic activity.”
• October LFS data is due on November 14.

• RES 4: $71.47 - High Jun 23 and a key medium-term resistance 
• RES 3: $67.68 - High Jul 30
• RES 2: $65.77/68.43 - High Sep 26 and key resistance 
• RES 1: $62.59 - High Oct 24    
• PRICE: $60.77 @ 07:18 GMT Nov 12 
• SUP 1: $58.83/55.96 - Low Nov 6 / Low Oct 20 and bear trigger
• SUP 2: $54.85 - Low May 5
• SUP 3: $54.16 - Low Apr 9 and a key support
• SUP 4: $53.23 - 1.764 proj of the Jul 30 - Aug 13 - Sep 26 price swing   

The pullback in WTI futures since Oct 24, appears to be a flag formation - a bullish continuation pattern. This suggests that an upward corrective cycle is intact for now. Price has recently traded through the 50-day EMA, at $60.85, signalling scope for a stronger recovery. Note too that resistance at $62.34, the Oct 8 high, has been pierced. A clear move through it would expose key resistance at $65.77, Sep 26 high. The bear trigger is $55.96, the Oct 20 low.