SWEDEN: Lower-than-expected June Inflation Strengthens Case For August Cut
Jul-12 06:27
Swedish June CPIF ex-energy inflation was lower than expected at 2.3% Y/Y (vs 2.5% expected by consensus and the Riksbank’s June MPR, 3.0% prior). The monthly rate was -0.1% (vs 0.1% cons, 0.8% prior).
- In isolation, this makes an August Riksbank cut (which is already the base case amongst markets and the Riksbank’s June MPR policy path) all the more likely.
- SEK has unsurprisingly weakened on release, with NOKSEK 0.3% higher at typing and recovering almost all of yesterday’s losses.
- A first glance at the details shows a moderation in recreation and culture (-0.2% Y/Y vs 1.8% prior) and restaurants and hotels (3.1% Y/Y vs 4.9% prior; -1.4% M/M). This dynamic was expected, with a portion of May’s services price acceleration being reversed in June (as one-off impacts from Taylor Swift concerts and Eurovision drop out of the comparison).
- Package holidays rose 14.5% Y/Y (vs 13.0% prior) and 29.0% M/M, but nonetheless pulled down the annual CPI inflation rate by 0.23pp.
- Upside risks to food prices were not realised, with that category moderating to 1.1% Y/Y (vs 1.5% prior) and -0.1% M/M.
- Electricity and fuel prices fell 12.7% Y/Y in June (vs -8.2% prior), helping overall CPIF undershoot consensus at 1.3% Y/Y (vs 1.6% cons, 1.5% Riksbank and 2.3% prior).
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UK DATA: UK GDP a tenth higher than expected driven higher by services
Jun-12 06:17
- Looking into the details of UK GDP (which surprised to the upside by one tenth on the M/M print - note that the previous months were not open to revision), the upside was driven by services which were 0.3ppt higher than expected at 0.2%M/M.
- As expected the biggest drag within services was from "wholesale and retail trade" (as seen in the soft retail sales numbers). The upside contributions were largely from "information and communication" as well as "professional scientific and technical activities".
- The downside surprises to GDP were seen in IP (due to weak manufacturing - with the other IP subsectors growing). And within manufacturing specifically manufacturing of pharmaceuticals and food products were the weakest.
- Construction also surprised to the downside, driven by 7/9 subsectors.
- GBPUSD is very, very marginally higher than pre-data, but only a single figure number of pips.
- Overall, little policy impact from this print with next week's CPI print much more important.
GOLD TECHS: Bear Threat Remains Present
Jun-12 06:16
- RES 4: $2481.5 - 2.764 proj of the Oct 6 - 27 - Nov 13 price swing
- RES 3: $2452.5 - 2.618 proj of the Oct 6 - 27 - Nov 13 price swing
- RES 2: $2450.1 - High May 20 and the bull trigger
- RES 1: $2340.1/2387.8 - 20-day EMA / High Jun 7
- PRICE: $2314.8 @ 07:14 BST Jun 12
- SUP 1: $2286.9 - Low Jun 7
- SUP 2: $2277.4 - Low May 3 and a pivot support
- SUP 3: $2187.4 - Low Mar 28
- SUP 4: $2146.2 - Low Mar 18 and key short-term support
A sharp sell-off in Gold last Friday reinforces a short-term bearish theme. The yellow metal has cleared support around the 50-day EMA, at 2313.6. The break confirms a resumption of the reversal that started May 20 and signals scope for a deeper correction near-term. This has opened $2277.4, the May 3 low. Clearance of this price point would strengthen a bearish theme. Initial firm resistance to watch is $2387.8, the Jun 7 high.
MNI: GERMAN MAY CPI +2.4 % Y/Y
Jun-12 06:00
- MNI: GERMAN MAY CPI +2.4 % Y/Y
