RENEWABLES: UK Morning Wind Forecast

Norwegian April credit growth was 4.1% Y/Y (vs 3.8% prior), the highest rate since September 2023. Norges Bank is most focused on spot inflationary pressures in determining when to start its easing cycle, with credit data (alongside the firmer-than-expected Q1 GDP reading and still-low unemployment rate) suggesting that the economy is coping resiliently with policy rates at 4.5%.

• The April acceleration was spurred by another notable increase in non-financial corporation credit growth to 2.7% Y/Y (vs 2.2% in March, 1.5% in February). Corporate lending is recovering from a low base, but recent momentum is nonetheless notable.
• Household credit growth (which accounts for 60% of total public debt) inched up to 4.2% Y/Y (vs 4.1% prior), its highest since March 2023.
• Meanwhile, the more volatile municipal government lending growth rose 7.4% Y/Y (vs 7.1% prior). 

• RES 4: 6080.75 High Feb 26    
• RES 3: 6057.00 High Mar 3  
• RES 2: 6000.00 Round number resistance      
• RES 1: 5993.50 High May 20 and the bull trigger                                     
• PRICE: 5882.50 @ 07:32 BST May 26 
• SUP 1: 5756.50/5719.58 Low May 23 / 50-day EMA and key support                        
• SUP 2: 5596.00 Low May 7  
• SUP 3: 5455.50 Low Apr 30
• SUP 4: 5355.25 Low Apr 24 

A bullish trend condition in S&P E-Minis remains intact and the latest pullback is considered corrective. Last Friday’s sell-off resulted in a print below the 20-day EMA, at 5779.53. A key support lies at 5719.58, the 50-day EMA. A clear break of this average is required to highlight a stronger reversal and signal scope for a deeper retracement. Sights are on the bull trigger at 5993.50, the May 20 high.

Bunds are lower this morning as equities rally, driven by U.S. President Trump delaying the imposition of 50% tariffs the EU to July 9.

• EC President Von der Leyen pointed to a “good call” with Trump, although stressed that a good deal will take time, as she pointed to the EU’s desire to advance talks “swiftly and decisively”.
• Futures stick within Friday’s range, last -36 at 130.29.
• Bulls remain in technical control.
• Initial support and resistance located at the May 22 low (129.49) & May 23 high (130.94).
• Yields 2-4bp higher, curve bear flattens.
• EGB spreads to Bunds narrow against the risk-on backdrop, while Moody’s choice to move Italy to a positive ratings outlook after hours on Friday promotes BTP outperformance.
• BTP/Bunds initially move into ~98bp, 3.5bp narrower on the day, before the move fades back to the psychological 100bp area.
• While Moody’s outlook move is BTP-supportive, many expected Moody’s to deliver the outlook tweak, helping explain the lack of meaningful movement below 100bp in the spread.
• Next downside level of interest comes at the September ’21 closing low (97.9bp), followed by the March & February ’21 closing lows (92.9bp & 90.6bp, respectively).
• ECB’s Lagarde & Nagel are due to speak today, with those comments set to focus on a fragmented world and trade disputes, as opposed to outright monetary policy matters.