EUROZONE ISSUANCE: EGB Supply - W/C 28 April, 2025

• The concept of residual seasonality, whereby data exhibit a seasonal pattern even after adjustment (and seemingly especially so for inflation data), has been a contentious topic.
• Cleveland Fed’s Lunsford finds evidence of residual seasonality across five measures of PCE inflation (headline, core, market-based core, median and trimmed mean) when looking across data from 1987 to Jan 2025. Full note here.
• “For core and market-based core PCE inflation, average inflation in January has been 1.5 to 2.0 times higher than in November and December, again, depending on the sample period.”
• “Following the high inflation from 2021 through 2023, these residual seasonal fluctuations can complicate assessments of monthly data, making it hard to know if inflation is returning sustainably to 2 percent.”
• The research finds the most prominent upward bias is in January alone rather than seeing any lingering into February.
• We note that for February as it comes ahead of Friday’s February report which sees core PCE inflation at 0.3% M/M but perhaps only just rounding down to this rate according to unrounded estimates. It follows 0.285% M/M in Jan, 0.21% in Dec and 0.10% in Nov (before any revisions). 

0QM5 97.12c vs 2QU5 97.50c, bought the 2yr for half in 10k.

• RES 4: 5970.87 61.8% retracement of the Feb 19 - Mar 13 bear leg  
• RES 3: 5924.59 50-day EMA  
• RES 2: 5864.25 Low Jan 13 and a recent breakout level
• RES 1: 5837.25 High Mar 25                    
• PRICE: 5818.75 @ 13:50 GMT Mar 26  
• SUP 1: 5650.75/5559.75 Low Mar 18 / 13 and the bear trigger                  
• SUP 2: 5483.50 2.00 proj of the Dec 6 ‘24 - Jan 13 - Feb 19 swing 
• SUP 3: 5396.00 2.236 proj of the Dec 6 ‘24 - Jan 13 - Feb 19 swing
• SUP 4: 5341.87 2.382 proj of the Dec 6 ‘24 - Jan 13 - Feb 19 swing          

S&P E-Minis are trading at their recent highs. The trend condition is bearish and the latest recovery appears corrective. MA studies remain in a bear-mode set-up, highlighting a dominant downtrend. However, this week’s gains have resulted in a breach of the 20-day EMA. This signals scope for a continuation higher near-term - towards 5864.25, the Jan 13 low. A reversal lower would refocus attention on 5559.75, the Mar 13 low and bear trigger.