COMMODITIES: Bearish Theme in WTI Futures Intact, Recovery Appears Corrective

The Swedish goods trade surplus was steady in February SEK14.4bln, with January’s reading revised down to SEK14.5bln from SEK15.1bln initial. On a 12-month rolling basis, the surplus rose to SEK72.6bln (vs SEK69.4bln prior), the highest since September.

• Partner-level trade data is only available as of January, so it is difficult to gauge whether any tariff front-running to the US has been at play. Of the threats already made by US President Trump against the EU, Sweden is most sensitive to proposed levies on vehicle exports (in Q3 2024, Swedish vehicle exports to the US accounted for 0.7% of GDP). However, data as of January doesn’t show a material pickup in vehicle exports just yet. 
• The January trade surplus with the US was SEK6.8bln (vs SEK10.4bln prior). The 12-month rolling surplus fell a touch to SEK115.2bln (vs SEK115.5bln prior).
• The 12-month rolling trade deficit with Germany and China widened slightly in January.
• The volume of goods exports rose 4% Y/Y in January, while imports rose 2% Y/Y. 

Ahead of the Spring Statement Citi note that “the initial reaction may be light given the apparent lack of meaningful positioning into the event, but we think it will be hard to find any positives for gilts”.

• The believe that “headroom greater than GBP10lbn likely requires larger unspecified spending cuts that the market will look through; a remit close to consensus likely implies an upward revision on 23 April; and of course, the fiscal position will remain precarious into a likely challenging Budget in the Autumn, including potential revisions to the OBR’s productivity assumptions and further increase in defence spending”.
• They conclude with “despite this, swap spreads have been trading well into today. This could suggest that the bad news is in the price. It is worth nothing, however, that while two of the last four fiscal events have led to richer gilt swap spreads on the day, for all four that has given way to cheapening over the following week on longer-term fiscal worries”.

Despite recent gains, a bearish trend condition in WTI futures remains intact. However, a key pivot resistance at $69.12, the 50-day EMA, has been pierced. A clear breach of this hurdle would strengthen a bullish theme and open $70.98, the Feb 25 high. For bears, a reversal lower would expose the bear trigger at $64.85, the Mar 5 low. Clearance of this level would resume the downtrend and open $63.73 next, the Oct 10 ‘24 low. A clear uptrend in Gold remains intact and the yellow metal is holding on to the bulk of its recent gains. Last Thursday’s fresh trend high reinforces the bull theme and sights are on $3079.2 next, a Fibonacci projection. Note that moving average studies remain in a bull-mode position, highlighting a dominant uptrend and positive market sentiment. Support is at $2970.1, the 20-day EMA.

• WTI Crude up $0.28 or +0.41% at $69.29
• Natural Gas up $0.09 or +2.27% at $3.927
• Gold spot up $5.15 or +0.17% at $3025.63
• Copper up $7.4 or +1.42% at $528.45
• Silver down $0.11 or -0.31% at $33.628
• Platinum down $4.26 or -0.43% at $976.6