SILVER TECHS: Trading Above Support

NOK is off the session’s strongest levels alongside oil, but continues to outperform the G10 basket. Expect global developments to continue dictating NOK price action in the near-term, with little in the way of market moving domestic data due ahead of Norges Bank’s November decision (which in any case is not expected to bring any surprises).

• EURNOK is down 0.22% at 11.6442 at typing, up from a 11.6207 session low. Initial support is the October 8 low at 11.5896, which shields stronger support at 11.5387 (Sep 15 low).
• NOKSEK is up 0.4% today at 0.9402, but continues to consolidate below the key 0.9500 pivot level. Trendline support drawn from the March 2022 high is also still intact.
• Crude markets have rallied today amid reports that the US and India are close to a deal to lower US tariffs that could see India gradually reduce Russian oil imports (and therefore channel oil demand towards other producers).
• Norwegian September LFS unemployment data is due tomorrow morning. While important to monitor, the release can exhibit significant volatility month-to-month and in any case is not Norges Bank’s preferred unemployment metric. 

Delivering the customary address to the Senate ahead of the European Council summit, PM Giorgia Meloni speaks on several issues set to come up in the 23 October leaders' meeting in Brussels. 

• Amid a drive by some countries to utilise ~EUR140bln in frozen Russian assets held in the EU to help fund Ukraine's reconstruction, Meloni says "Further measures concerning Russian frozen assets must respect international law, [and] safeguard [the] financial stability of the eurozone." Comments would appear to signal the Italian gov't is more circumspect on the prospect than others such as Germany.
• Meloni: "Italy calls on the EU to make the flexibility clause aimed at boosting defence spending permanent." The current exemption allows for increased defence spending beyond the EU's fiscal rules up to 1.5% of GDP for four years.
• On support for Ukraine: "Italy has already made it clear that it does not envisage sending soldiers to Ukrainian territory. Our position has not changed."
• On EU's green transition: "We call on the European Commission to correct a number of risky choices made in the past with the Green Deal." In draft conclusions seen by MNI's Policy team, there does appear to have been some movement on the issue of Green Transition amid pressure from national capitals (see 'MNI: EU Summit Draft Shows Pragmatism On Green Transition', 20 Oct).
• Later today, at ~16:15CET (10:15ET, 15:15BST), Meloni will deliver a similar address to the Chamber of Deputies. 

EUR STIRs see light dovish spillover from SONIAs following this morning’s soft UK inflation report, but aggregate moves are very modest.

• ECB-dated OIS now price 20bps of easing through September 2026, up from just under 10bps at the start of this month.
• There’s very little meeting-specific conviction in this pricing though. There’s virtually no implied probability of a cut at next week’s meeting, and less than 6bps of sequential cuts priced into each of the seven subsequent meetings.
• If another cut is delivered this cycle, markets lean in favour of such a move coming at a meeting with updated macroeconomic projections – highlighted by the negative Oct/Dec/Feb, Feb/Mar/Apr and Apr/Jun/Jul butterfly spreads.
• Euribor futures are flat to +1.5 through the blues.
• Regional focus remains on Friday’s flash October PMIs. The remainder of today’s calendar is light – we don’t expect much new from ECB’s de Guindos or Lagarde.