SCHATZ TECHS: (Z5) Corrective Cycle Intact

Norwegian retail sales excluding motor vehicles rose 0.2% M/M SA in August. Since June 2024, retail sales volumes have been on a steady upward trend and have underpinned household consumption.

• On a 3m/3m basis, sales grew 0.9% after 1.1% in July. Annual sales growth was 5.0% Y/Y (vs 5.1% prior).
• Similar trends can be seen in retail sales excluding motor vehicles and fuel.
• The Q3 Regional Network survey saw retail trade expected output at 0.4% this quarter and 0.5% Q/Q in Q4.
• Elsewhere, August lending data saw a modest deceleration relative to July. Household lending growth was 4.2% (vs 4.3% prior), while corporate lending growth notable slipped to 2.0% (vs 2.4% prior). 

• RES 4: $76.89 - 2.764 proj of the Apr 9 - 23 - May 5 price swing
• RES 3: $74.79- 2.500 proj of the Apr 9 - 23 - May 5 price swing
• RES 2: $73.39 - High Jun 23 and a bull trigger 
• RES 1: $66.42/68.43 - Intraday high / High Jul 30 and key resistance   
• PRICE: $65.27 @ 07:28 BST Sep 29
• SUP 1: $60.85 - Low Aug 13 and the bear trigger 
• SUP 2: $57.50 - Low May 30
• SUP 3: $54.89 - Low May 5
• SUP 4: $54.10 - Low Apr 9 and a key support

WTI futures are holding on to their recent gains. The contract has breached resistance at $65.43, the Sep 2 high and this has improved the short-term condition for bulls. However, the next key resistance is at $68.43, the Jul 30 high, where a break is required to signal scope for a stronger recovery. For bears, a reversal lower would refocus attention on key support at $60.85. A break of this level would reinstate a bearish theme.

• Reeves does sound a little more committed to not raising VAT than the comments over the weekend in her interview on Sky News this morning
• She has explicitly noted that a rise in VAT would hit working people - and again made the commitment to improve living standards for working people.
• It's still not a promise not to increase VAT but seems stronger wording than over the weekend.
• However, caveat all of this with the Treasury having not yet received the first draft of OBR forecasts - they don't come until Friday. So if those are worse than the c. GBP30bln gap than media sources have stated that the Treasury is expecting, the VAT question could come up again.
• The MNI Markets view has been that an income tax rise is more likely than a VAT rise, given that a VAT increase would also likely be associated with more difficulties for the MPC to cut rates.