FED: Trump Admin Reiterates Calls For Rate Cuts After CPI
Unsurprisingly, the Trump administration has taken to social media calling for Fed rate cuts since the CPI data crossed:
- President Trump posted the following on Truth Social: “PI JUST OUT. GREAT NUMBERS! FED SHOULD LOWER ONE FULL POINT. WOULD PAY MUCH LESS INTEREST ON DEBT COMING DUE. SO IMPORTANT!!!”
- Vice President Vance posted the following on X, quoting a post that provided the CPI figures: “The president has been saying this for a while, but it's even more clear: the refusal by the Fed to cut rates is monetary malpractice”
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STIR FUTURES: BLOCK: Jun'25 1M SOFR Futures Buy
- 8,049 SERM5 95.68, post time offer at 0946:05ET
SEK: Swedish Funds Net Sellers Of US Equities Again in April
Swedish Investment Fund Association members were net sellers of North American (assumed mostly US) equity funds for the fourth consecutive month in April. Net sales of NA funds totalled SEK4.8bln, bringing total net sales this year to SEK35.0bln.
- In contrast to January, February and March, members were also net sellers of Swedish funds in April (net sales totalled SEK6.0bln). However, year-to-date there has still been a SEK24.4bln inflow into Swedish funds.
- A rotation out of US equities and into European (including Swedish) counterparts was a key market theme in early/mid-Q1, and touted as an important driver of USDSEK’s 10% fall in January and February (alongside a significant acceleration in Swedish spot inflationary pressures).
- April’s price action in USDSEK was mostly a function of the “Liberation Day” fallout and associated uncertainty, with 1m realised volatility reaching its highest since March 2020 on April 30. However, it will be interesting to see if equity fund rebalancing earlier this year continues to play out in the coming months, particularly as tariff negotiations progress on the US side.
- USDSEK is currently at 9.7900, 3.3% above the April 22 lows. The pair has started to consolidate above the 20-day EMA, with key resistance seen at 9.9445 (50-day EMA). The short-term outlook for the cross will likely be dictated by the USD leg, with focus on tariff headlines and tomorrow’s CPI report. However, Wednesday’s Riksbank meeting minutes will be an important input to assess the likelihood of a June cut, following last week’s slight dovish guidance tilt.
BOBL TECHS: (M5) Has Cleared The 50-Day EMA
- RES 4: 120.20 High Dec 12 ‘24 (cont)
- RES 3: 119.960 High Apr 7 and the bull trigger
- RES 2: 119.600/780 High May 7 / High Apr 22
- RES 1: 119.143 20-day EMA
- PRICE: 118.400 @ 14:35 BST May 12
- SUP 1: 118.340 Intraday low
- SUP 2: 118.105 50.0% retracement of the Mar 6 - Apr 7 bull run
- SUP 3: 117.680 Low Apr 9 and a key support
- SUP 4: 117.600 Low Mar 28
A bull cycle in Bobl futures remains intact, however, for now a corrective phase is in play and today’s sell-off strengthens a near-term bearish theme. The contract has traded through the 50-day EMA and cleared 118.543, 38.2% of the Mar 6 - Apr 7 bull run. This exposes 118.105, the 50.0% retracement. Initial resistance to watch is 119.143, the 20-day EMA. A break would signal a potential reversal.
