SWEDEN: Unsurprising Uptick In Inflation Expectations in March

Taken at face value, the January LFS report was weak. One month of data isn't enough to meaningfully price back in a 25bp March cut yet, but the Riksbank are certainly sensitive to weak activity/labour market data. The increase in the January unemployment rate to 9.7% (vs 8.5% prior) was the largest one month change since April 2020 (i.e the start of the pandemic).

•  However, Statistics Sweden suggest the data “may be overestimated” because “unemployment was at a relatively low level in the LFS January 2024”. They note that “further measurements are required” and thus the data should be interpreted with “some caution”.
• Swedbank also wrote last week that Swedish LFS response rates have fallen significantly over the last decade, averaging 43% in 2024.
• Employment growth was -0.5% M/M (vs a strong 0.8% prior), bringing the employment rate down to 68.6% (vs 69.0 prior).
• On a 3m/3m basis, employment growth was flat, but negative when reported to 2dps. As such, this was the fifth consecutive negative month of job growth.
• The Riksbank will continue to assess the labour market using a variety of indicators, including the Public Employment Service data (where the unemployment claims rate has flatlined at 7.0% in recent months) and the Economic Tendency Indicator's expected employment metrics (which have slightly increased over the last three months).  

• RES 4: 6205.38 0.764 proj of the Jan 13 - 24 - Feb 3 price swing     
• RES 3: 6200.00 Round number resistance 
• RES 2: 6178.75 High Dec 6 and key resistance
• RES 1: 6162.25 High Jan 24                 
• PRICE: 6143.00 @ 07:16 GMT Feb 17 
• SUP 1: 6075.54 20-day EMA           
• SUP 2: 6014.00/5935.50 Low Feb 10 / 3
• SUP 3: 5892.37 76.4% retracement of the Aug 5 - Dec 6 bull leg
• SUP 4: 5842.50 Low Jan 14

S&P E-Minis traded higher this week and the contract maintains a firmer tone. The latest recovery undermines a recent bearish threat and attention turns to resistance at 6162.25, the Jan 24 high. Clearance of this level would expose key resistance at 6178.75, the Dec 6 ‘24 high. A move above this hurdle would resume the primary uptrend. Initial key support has been defined at 6014.00, the Feb 10 low. A break would be a bearish development.

TYH5 108p, bought for '01 in 5k.