SWEDEN: Unemployment Claims Rate Looks To Have Stopped Rising

Modest hawkish repricing in EUR STIRs this morning as core global FI markets remain under pressure.

• ECB-dated OIS covering this month’s meeting little changed, showing 23.5bp of cuts, with ~90bp of easing now showing through December, as the recent round of hawkish repricing extends further.
• The market remains comfortable with the idea of cuts at the January and March meetings.
• However, the market-implied ECB cutting path is now much flatter, with pricing of the potential for 50bp steps removed in recent weeks.
• April & June meetings are priced much closer to 50/50 when it comes to the odds of further cuts.
• Euribor futures 1.0-3.5 lower, off session lows as Bunds edge away from lows in recent trade.
• Much of the strip is threatening clean breaks below October/November lows.
• Little of note in comments from ECB’s Lane & Rehn, sticking to the Bank’s central view.
• Lane noted that the Bank will have to follow “the middle path of being neither too aggressive nor too cautious in our actions.”
• Rehn pointed to a clear direction of travel, with rates set to leave restrictive territory come summer.
• Looking ahead, final Eurozone CPI data is due on Friday, with a raft of ECB speak and the minutes of the December meeting due throughout the week.

• The Dollar was on the front foot in G10, only the Yen was holding onto small gains, albeit by just 0.16%.
• The Dollar is seeing a fresh bid as Europe Joins the session, at a new intraday high against GBP, EUR, SEK, INR, ZAR, MXN, NZD, and the NOK.
• Goldman Sachs has updated its EURUSD forecast and targets parity in 3 Months, {r2} While NAB look for Cable to trade below 1.2100 in the coming days.
• Next immediate support in the EURUSD is right here at 1.0201 61.8% of the Sep ‘22 - Jul ‘23 bull leg.
• For Cable, it is now testing 1.2126 Low Jan 13, and further downside momentum will open to 1.2087 0.764 proj of the Sep 26 - Nov 22 - Dec 6 price swing.

• RES 4: 6178.75 High Dec 6 and key resistance   
• RES 3: 6163.75 High Dec 16  
• RES 2: 6068.25/6107.50 High Jan 6 / High Dec 26 
• RES 1: 5966.50 50-day EMA and a pivot resistance          
• PRICE: 5842.25 @ 07:25 GMT Jan 13 
• SUP 1: 5831.00 Intraday low       
• 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 and the contract is trading lower today. The reversal from the Dec 26 high, confirms the end of the Dec 20 - 26 correction. 5866.00, the Dec 20 low and a key short-term support, has been cleared. This strengthens a bearish theme and opens 5811.65, a Fibonacci retracement. Initial firm resistance is 6107.50, the Dec 26 high. First pivot resistance is seen at 5996.50, the 50-day EMA