SWEDEN: Financial Stability Outlook Has Improved, But Risks Remain - FSA
The Swedish Financial Supervisory Authority (FSA) notes that "the outlook for financial stability has improved somewhat in the past six months" in its H2 2024 report. This arises due to resilient banks, dampenened credit growth and expectations for a cyclical recovery in consumption on the back of lower interest rates.
- Meanwhile, commercial real estate (CRE) firms "have continued to adapt to the higher interest rates", with improved access to financing. The FSA writes that "firms with high indebtedness need to continue to reduce their debt and strengthen their financial position".
- The main risk to financial stability comes from "the uncertain global economic and geopolitical situation", with a deterioration in global security increasing the risk of cyber attacks on the system.
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EGBS: Morgan Stanley Recommend EUR 10s30s Swap Steepeners (vs. ESTR)
Morgan Stanley note “EUR 10s30s lagged the steepening vs the rest of the G3 curves, something which should be inconsistent vs. the macro backdrop and likely influenced by the recent duration weakness given the positive directionality between the two.”
- As a result, they see value in entering 10s30s steepeners (vs. ESTR).
GERMAN DATA: September PPI Dragged Lower By Energy
German September PPI came in 0.3pp lower than expected at both the yearly and monthly measure, at -1.4% Y/Y (vs -0.8% prior) and -0.5% M/M (vs +0.2% prior).
- Consistent with German CPI developments in September, energy moved further into deflationary territory, at -6.6% Y/Y (vs -4.6% prior).
- That leaves ex-energy PPI unchanged vs August, at +1.2% Y/Y - the joint highest rate since August 2023.
- Looking at the non-energy categories, non-durable and consumption goods both ticked up to +1.5% Y/Y (vs +1.0% prior). Their yearly rates also both run at their respectively highest rate since December 2023.
- On Intermediate goods, the recent upward trend did not continue in September - its yearly rate declined slightly, to +0.5% Y/Y (vs +0.7% prior).
- Investment and durable goods PPI inflation remained unchanged vs August, at +2.0% Y/Y and +0.9%, respectively.
USDCAD TECHS: Approaching Last Week’s High
- RES 4: 1.4000 Round number resistance
- RES 3: 1.3992 2.0% 10-dma envelope
- RES 2: 1.3946 High Aug 5 and a key resistance
- RES 1: 1.3839 High Oct 15
- PRICE: 1.3821 @ 07:57 BST Oct 21
- SUP 1: 1.3747/3675 Low Oct 14 / 20-day EMA
- SUP 2: 1.3567 Low Oct 7
- SUP 3: 1.3473/3420 Low Oct 2 / Low Sep 25 and the bear trigger
- SUP 4: 1.3413 Low Feb 9
The USDCAD trend outlook remains bullish and the pair is trading higher today. Sights are on last week’s 1.3839 high (Oct 15). The pair has recently pierced 1.3822, 76.4% of the Aug 5 - Sep 25 bear leg. A clear break of this level would reinforce a bullish theme and open 1.3946, the Aug 5 high. Initial firm support to watch lies at 1.3675, the 20-day EMA. A pullback would be considered corrective and allow an overbought condition to unwind.
