SWEDEN: Slightly Smaller Deficit Than Debt Office Projections In January
The Swedish January budget balance was -SEK23.5bln (vs -SEK127.2bln prior). This was a little higher than the NDO’s -SEK31.3bln projection. However, forecast errors in November and December mean the budget deficit is SEK18bln larger than forecast in the November borrowing report.
- The January forecast error was largely due to higher net lending to government agencies than expected. The primary balance of -SEK30.7bln was broadly in line with forecasts.
- The next Swedish nominal bond auction is on Feb 12, where SEK1.5bln of the 0.75% May-28 SGB 1060 and SEK3.5bln of the 2.25% May-35 SGB 1066 will be on offer. Auctions have generally been digested smoothly so far this year.
- The next borrowing report will be released on May 22.
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US TSY FUTURES: FV/US Flattener Blocked
Latest block trades lodged at 07:20:39 London/02:20:39 NY:
- FVH5 10,400 lots blocked at 106-01.75, looks like a seller.
- USH5 3,298 lots blocked at 112-08, looks like a buyer.
- Points to a flattener, DV01 over $400K.
- 5s20s curve ~0.5bp flatter since the block, curve still set for steepest close since October 25.
Fig. 1: U.S. 5-/20-Year Yield Curve (bp)
Source: MNI - Market News/Bloomberg
EQUITY TECHS: E-MINI S&P: (H5) Support Remains Exposed
- RES 4: 6194.19 1.236 proj of the Aug 5 - Sep 3 - Sep 9 price swing
- RES 3: 6178.75 High Dec 6 and key resistance
- RES 2: 6163.75 High Dec 16
- RES 1: 6068.25/6107.50 High Jan 6 / High Dec 26
- PRICE: 5957.75 @ 07:24 GMT Jan 8
- SUP 1: 5911.25/5866.00 Low Jan 3 / Dec 20
- 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 despite the most recent move higher. The reversal lower from the Dec 26 high, highlights the end of the Dec 20 - 26 correction. Attention is on 5866.00, Dec 20 low and a key S/T support. Clearance of this level would strengthen a bearish theme. Initial firm resistance is 6107.50, Dec 26 high. A breach of this hurdle would highlight a bull reversal and open key resistance at 6178.75, the Dec 6 high.
STIR: Just Over 100bp Of ECB Cuts Still Priced Through '25
Light dovish moves in EUR STIRs fade as the recovery from Tuesday/Asia lows in Bunds moderates, with the bulk of the late ‘24/early ’25 hawkish repricing holding.
- ECB-dated OIS flat on the day, showing ~102.5bp of cuts through year-end, with the next 25bp move almost fully discounted come the end of this month’s decision.
- Euribor futures -0.5 to +1.5. Only ERH5 has pierced its November low in recent sessions.
- Comments from ECB’s Villeroy are due this evening, with lower tier Eurozone data (confidence metrics and PPI) scheduled this morning.
- That will leave much of the focus on the long end and U.S. data (ADP employment and weekly jobless claims).
ECB Meeting | €STR ECB-Dated OIS (%) | Difference Vs. Current Effective €STR Rate (bp) |
Jan-25 | 2.674 | -24.4 |
Mar-25 | 2.405 | -51.3 |
Apr-25 | 2.221 | -69.7 |
Jun-25 | 2.076 | -84.2 |
Jul-25 | 2.024 | -89.4 |
Sep-25 | 1.952 | -96.6 |
Oct-25 | 1.918 | -100.0 |
Dec-25 | 1.893 | -102.5 |
