SWEDEN: Swedbank Caveat Weak Retail Sales, But Door Still Open For An August Cut
Swedbank write that “if monthly data for household consumption, business production and GDP for May and June develop weakly, it is not improbable that the key interest rate will be lowered as early as August”. However, their main scenario is still “that this data comes in a little stronger than retail trade in May and that the Riksbank waits to lower the key interest rate until September”.
- Swedbank note that the weak May retail sales report (which saw the lowest monthly reading in almost 30 years) was supported by the Economic Tendency Survey, but also “partly a result of temporary factors”.
- “Consumer confidence and other indicators do not indicate that the underlying trend has suddenly weakened significantly. There are no obvious oddities in calendar correction, seasonal adjustment or constant price calculations of the data”.
- “Retail trade is only about a third of total household consumption and other areas may have developed more strongly”.
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EGB SYNDICATION: Italy Dual-Tranche New 5y / 10y Green Tap: Final Terms
- Size: E12bln (MNI expected E7-10bln)
- Books closed in excess of E120bln (incl. E5.3bln JLM interest)
- Spread set earlier at 2.95% Jul-30 +8bps (guidance was +10bps area)
- Maturity: 1 October 2030
- Coupon: Short first
- ISIN: IT0005654642
- Size: E5bln WNG
- Guidance: 0.95% Mar-37 +6bps (guidance was +9bps area)
- Books closed in excess of E94bln (incl. E3.8bln JLM interest)
- ISIN: IT0005596470
- Settlement: 11 June 2025 (T+5)
- Bookrunners: Barclays (DM/B&D) / BNPP / BofA / CACIB / Santander / Societe Generale
- Timing: Allocations and pricing to follow
US 10YR FUTURE TECHS: (U5) Testing Resistance
- RES 4: 112-04+ High May 2
- RES 3: 111-25 High May 7
- RES 2: 111-05+ High May 9
- RES 1: 110-30 High May 30 and high Jun 2
- PRICE: 110-14 @ 11:20 BST Jun 4
- SUP 1: 109-26/12+ Low May 29 / 22 and the bear trigger
- SUP 2: 109-09+ Low Apr 11 and key support
- SUP 3: 109-00 Round number support
- SUP 4: 108-25+ 0.764 proj of the Apr 7 - 11 - May 1 price swing
Treasury futures are holding on to the bulk of their recent gains. A dominant bear cycle remains in play for now, and recent gains still appear corrective. However, the contract has breached an important resistance at 110-23, the May 16 high. A clear breach of this level would undermine a bear theme and highlight a stronger reversal, exposing 111-05+, May 9 high. For bears, a resumption of weakness would refocus attention on 109-12+, May 22 low.
STIR: Mix Of Short Setting & Long Cover Seen In Most SOFR Futures On Tuesday
OI data points to a mix of net short setting and long cover through the SOFR blues on Tuesday.
- The unchanged price status across the front 3 contracts means that we can’t make any definitive inference re: the direction of the apparent positioning adds and cover in those contracts.
| 03-Jun-25 | 02-Jun-25 | Daily OI Change |
| Daily OI Change In Packs |
SFRH5 | 1,070,435 | 1,068,762 | +1,673 | Whites | -7,428 |
SFRM5 | 1,428,383 | 1,452,788 | -24,405 | Reds | +10,569 |
SFRU5 | 1,121,424 | 1,119,211 | +2,213 | Greens | -5,547 |
SFRZ5 | 1,091,459 | 1,078,368 | +13,091 | Blues | +7,078 |
SFRH6 | 796,343 | 782,440 | +13,903 |
|
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SFRM6 | 757,451 | 767,340 | -9,889 |
|
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SFRU6 | 717,190 | 709,677 | +7,513 |
|
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SFRZ6 | 837,979 | 838,937 | -958 |
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SFRH7 | 671,938 | 669,179 | +2,759 |
|
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SFRM7 | 585,423 | 586,744 | -1,321 |
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SFRU7 | 414,903 | 415,716 | -813 |
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SFRZ7 | 412,156 | 418,328 | -6,172 |
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SFRH8 | 291,362 | 289,661 | +1,701 |
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SFRM8 | 214,547 | 213,817 | +730 |
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SFRU8 | 164,228 | 162,654 | +1,574 |
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SFRZ8 | 173,212 | 170,139 | +3,073 |
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