GOLD TECHS: Still Looking For Weakness

Swedish March flash CPIF ex-energy inflation was weaker than expected at 1.14% Y/Y (vs 1.48% Riksbank March MPR, 1.5% consensus and 1.38% prior).

• Fairly contained reaction in SEK FX so far, with NOKSEK quickly retracing the 0.15% rise seen immediately following the data, now back to +0.3% on the session at 0.9760.
• The table below shows the breakdown of the March inflation print by CPIF analysis groups and CPI subcomponents. Food inflation was a large downward contributor, while energy unsurprisingly accelerated.
• Developments since the Riksbank’s March decision have been dovish on net, but there is still plenty of time before the May 7 decision to keep a May hike on the table.  Board members are certainly cognizant of the risks from the "hawkish" scenario in the March MPR.
• That said, low underlying inflationary conditions heading into the Iran war may support a less aggressive tightening reaction from the Riksbank compared to the ECB.
• Supporting this assessment, the Swedish Trade Union Confederation’s Chief Economist said over the weekend that recent energy price rises would push unions to demand extra compensation: “The risk of a price-wage spiral in Sweden is close to zero”….” We are not chasing short-term profits, but long-term good real wages. It is important that the Riksbank is also clear that it understands this”

• RES 4: 186.87 High Jan 23 and a key M/T resistance  
• RES 3: 186.36 High Feb 9
• RES 2: 185.05 76.4% retracement of the Feb 9 - 12 bear leg
• RES 1: 184.77 High Feb 25 and a key resistance
• PRICE: 184.32 @ 07:13 BST Apr 7
• SUP 1: 182.59/181.87 Low Mar 30 / 16 and a key short-term support
• SUP 2: 180.81 Low Feb 12 and a reversal trigger 
• SUP 3: 180.10 Low Dec 5 ‘25
• SUP 4: 179.30 23.6% of the Feb 28 ‘25 - Jan 23 bull cycle 

EURJPY continues to trade in a range. Note that price remains below the former base of a bull channel drawn from the Feb 28 ‘25 low, currently at 184.89. The channel break continues to highlight a reversal threat and if correct, signals scope for a test of the next key support at 180.81, the Feb 12 low. Resistance to watch is 184.77, the Feb 25 high. A clear break of this hurdle would instead signal a bullish reversal.

Austria and Germany will hold auctions today while Germany, Portugal, Spain, Italy and Belgium will all look to hold auctions later this week. We look for gross issuance of E24.8bln for the week, up from E22.0bln last week.

For the full document with a look ahead to issuance through the remainder of this week and next week click here.

• Austria will kick off auction issuance for the week this morning with a combined E2.3bln of the 3.45% Oct-30 RAGB (ISIN: AT0000A38239) and the on-the-run 10-year 3.20% Feb-36 RAGB (ISIN: AT0000A3RVH9) on offer.
• Germany will also come to the market this morning to hold a Green auction with E750mln of the 2.50% Feb-35 Green Bund (ISIN: DE000BU3Z047) on offer alongside E750mln of the 0% Aug-50 Green Bund (ISIN: DE0001030724).