EM ASIA CREDIT: MNI EM Credit Market Wrap - Asi

The Swedish manufacturing PMI rose to 53.5 in February, from a 0.2p point upwardly revised 53.1 prior. Although there was no consensus for the print, it’s another solid piece of economic data which underscores expectations for a Riksbank pause in March. As noted above, SEK continues to outperform the G10 this morning.

• The manufacturing PMI has been in expansionary territory since July 2024, and has better reflected the recent rise in industrial production momentum than the Economic Tendency Indicator’s manufacturing sentiment series.
• In February, new orders were 54.8 (vs 54.4 prior), driven largely by the domestic orders component. Production (53.8 vs 52.3 prior) and employment (54.7 vs 54.5 prior) also rose on the month.
• Input prices remained expansionary, but softened to 52.4 (vs 54.3 prior), consistent with the Economic Tendency Indicator series.
• The Riksbank’s Business Survey (due 0830GMT today) may not alter expectations for the next decision, but will nonetheless be an important input for the March MPR rate path.

Gilt calls: 93.04/93.27 range.

• RES 4: 0.6429 High Dec 12 ‘24
• RES 3: 0.6414 38.2% retracement of the Sep 30 ‘24 - Feb 3 bear leg             
• RES 2: 0.6409 High Feb 21 and a bull trigger
• RES 1: 0.6309 50-day EMA
• PRICE: 0.6218 @ 07:56 GMT Mar 3
• SUP 1: 0.6193 Low Feb 28
• SUP 2: 0.6171/6088 Low Feb 4 / 3 and a key support
• SUP 3: 0.6045 1.500 proj of the Sep 30 - Nov 6 - 7 price swing
• SUP 4: 0.6000 Round number support

AUDUSD traded lower last week. The impulsive sell-off undermines a recent bullish theme. Price is once again trading below both the 20- and 50-day EMAs and the move down has exposed support at 0.6171, the Feb 4 low. A break of this level would strengthen a bearish theme and suggest scope for a test of the bear trigger at 0.6088, the Feb 3 low. Initial resistance to watch is 0.6309, the 50-day EMA.