OIL: EU Discussing Relaxed Syria Sanctions

• 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: 5950.00 @ 14:35 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.

Christian Stocker, acting federal chairman of the conservative Austrian People's Party (ÖVP) has confirmed that he will accept right-wing populist Freedom Party (FPÖ) leader Herbert Kickl's invite to start talks on forming a coalition gov't. Der Standard reports that the talks could begin as soon as this afternoon. Stocker's acquiescence to talks marks a stark contrast to previous ÖVP leader Karl Nehammer, who immediately rejected the prospect of talks with Kickl's party in the aftermath of the September 2024 federal election despite the FPÖ winning the most seats.

• In accepting Kickl's invite, Stocker said that "honest discussions" were needed. Do we want to be an "honest partner of the EU?" Do we want to orient ourselves towards the free world or towards dictatorships? [...]These questions and the answers will determine whether the Freedom Party is prepared to enter into a coalition with the ÖVP."
• With coalition talks now set to begin market focus will turn to potential policy implications of an FPÖ-ÖVP administration. The ÖVP will likely try to temper some of the more extreme policies of the FPÖ in relation to divergence from the European Union (Stocker said Austria must be a "reliable partner" to Brussels) and will limit prospects of rapprochement with Russia or a crackdown on media freedom.
• However, the ÖVP has swung more conservative on some issues in recent years, notably immigration. As such, controversial policies espoused by the FPÖ such as 'remigration' may gain political momentum, risking run-ins with EU courts. 

• Watch EGBs, they are making another attempt at their respective highs in Yield term.
• OAT target the next immediate support at 121.67 = 3.375%.
• For Bund, 2.60% would be at 131.06.