GLOBAL MACRO: EU Response To Steel & Aluminium Tariffs Alone Likely Small [1/2/]

• The centre-left Socialist Party (PS) has talked up a suspension of the reforms as its price for supporting the gov't in a post-speech censure vote, and indeed votes on the social security budget and state budget. The PS executive is set to meet at 1300CET (0700ET, 1200GMT), and it remains to be seen whether the party and its 66 deputies will back, abstain, or vote against the gov't come the probably Thursday 16 Jan censure vote. 
• Should Bayrou's middle-ground approach on pension refrom fall short of PS demands then it remains to be seen whether the Bayrou gov't can last. Depending on the nature of censure motions - whether it is put forward by the gov't, far-left or far-right will impact support - should the left-wing New Popular Front alliance (in which the PS sits) and the far-right National Rally vote against Bayrou it would be enough to see the gov't defeated, risking further political paralysis. 
   

• In the equity space, a bear threat in the S&P E-Minis contract remains present and the contract traded to a fresh short-term low on Monday. 5866.00, the Dec 20 low and a key short-term support, has been cleared. This strengthens a bearish theme and sights are on 5784.00, the Nov 4 low and an important short-term support. Initial pivot resistance is seen at 5991.72, the 50-day EMA.
• A bull cycle in the EUROSTOXX 50 futures contract remains intact and the latest pullback appears corrective. Initial support is at 4937.06, the 50-day EMA. It has been pierced, a clear break of this EMA would undermine a bullish theme and signal scope for a deeper retracement. For bulls, resistance at 5040.00, Dec 9 high, has recently been pierced. Clearance of it would resume the bull cycle that started on Nov 21 and open 5068.13, the 0.764 projection of the Nov 21 - Dec 9 - 20 price swing.

SX7E (17th Jan) 150, bought the call for 2.95 in 10.5k (100% del).