SWEDEN: Unemployment Claims Rate Looks To Have Stopped Rising
The Swedish unemployment claims rate was 7.0% for the third consecutive month in January. This supports our view that while overall labour market conditions remain subdued, it appears as though we have passed the peak pace of deterioration. This underscores expectations for the Riksbank to remain on hold in March, as its assesses the impact of past hikes on the economy.
- Total vacancies were ~100k in January, little changed from December. Relative to a year-ago, vacancies have fallen 22% Y/Y.
- 5k people were served redundancy notices in January. The 3mma of 5.1k remains below last year’s peak of 7.1k.
- January LFS data is due next Monday morning.
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STIR: 90bp OF ECB Cuts Priced Through '25, Lane & Rehn Stick To Script
Modest hawkish repricing in EUR STIRs this morning as core global FI markets remain under pressure.
- ECB-dated OIS covering this month’s meeting little changed, showing 23.5bp of cuts, with ~90bp of easing now showing through December, as the recent round of hawkish repricing extends further.
- The market remains comfortable with the idea of cuts at the January and March meetings.
- However, the market-implied ECB cutting path is now much flatter, with pricing of the potential for 50bp steps removed in recent weeks.
- April & June meetings are priced much closer to 50/50 when it comes to the odds of further cuts.
- Euribor futures 1.0-3.5 lower, off session lows as Bunds edge away from lows in recent trade.
- Much of the strip is threatening clean breaks below October/November lows.
- Little of note in comments from ECB’s Lane & Rehn, sticking to the Bank’s central view.
- Lane noted that the Bank will have to follow “the middle path of being neither too aggressive nor too cautious in our actions.”
- Rehn pointed to a clear direction of travel, with rates set to leave restrictive territory come summer.
- Looking ahead, final Eurozone CPI data is due on Friday, with a raft of ECB speak and the minutes of the December meeting due throughout the week.
ECB Meeting | €STR ECB-Dated OIS (%) | Difference Vs. Current Effective €STR Rate (bp) |
Jan-25 | 2.683 | -23.4 |
Mar-25 | 2.444 | -47.3 |
Apr-25 | 2.298 | -61.9 |
Jun-25 | 2.173 | -74.4 |
Jul-25 | 2.131 | -78.6 |
Sep-25 | 2.060 | -85.7 |
Oct-25 | 2.042 | -87.5 |
Dec-25 | 2.017 | -90.0 |
USD: Further upside continuation in the Dollar
- The Dollar was on the front foot in G10, only the Yen was holding onto small gains, albeit by just 0.16%.
- The Dollar is seeing a fresh bid as Europe Joins the session, at a new intraday high against GBP, EUR, SEK, INR, ZAR, MXN, NZD, and the NOK.
- Goldman Sachs has updated its EURUSD forecast and targets parity in 3 Months, {r2} While NAB look for Cable to trade below 1.2100 in the coming days.
- Next immediate support in the EURUSD is right here at 1.0201 61.8% of the Sep ‘22 - Jul ‘23 bull leg.
- For Cable, it is now testing 1.2126 Low Jan 13, and further downside momentum will open to 1.2087 0.764 proj of the Sep 26 - Nov 22 - Dec 6 price swing.
EQUITY TECHS: E-MINI S&P: (H5) Breaches Key Short-Term Support
- RES 4: 6178.75 High Dec 6 and key resistance
- RES 3: 6163.75 High Dec 16
- RES 2: 6068.25/6107.50 High Jan 6 / High Dec 26
- RES 1: 5966.50 50-day EMA and a pivot resistance
- PRICE: 5842.25 @ 07:25 GMT Jan 13
- SUP 1: 5831.00 Intraday low
- SUP 2: 5811.65 38.2% retracement of the Aug 5 - Dec 6 bull leg
- SUP 3: 5784.00 Low Nov 4
- SUP 4: 5698.25 50.0% retracement of the Aug 5 - Dec 6 bull leg
A bear threat in the S&P E-Minis contract remains present and the contract is trading lower today. The reversal from the Dec 26 high, confirms the end of the Dec 20 - 26 correction. 5866.00, the Dec 20 low and a key short-term support, has been cleared. This strengthens a bearish theme and opens 5811.65, a Fibonacci retracement. Initial firm resistance is 6107.50, the Dec 26 high. First pivot resistance is seen at 5996.50, the 50-day EMA
