STIR: Euro Rates Holding Retreat Off Highs, Still 85% Odds Of April ECB Cut

• Date $MM Issuer (Priced *, Launch #)
• 03/05 $26B Mars $2B 2Y +50, $3.25B 3Y +60, $4.5B 5Y +75, $2.75B 7Y +85, $5B 10Y +95, $2.75B 20Y +110, $4.75B 30Y +117, $1B 40Y +127
• 03/05 $1.5B Axon 5NC2, 8NC3
• 03/05 $1B *KommuneKredit WNG 5Y SOFR+44
• 03/05 $750M #Republic of Armenia 10Y 7.1%
• 03/05 $500M Acadia Health 8NC3
• 03/05 $500M Forestar Group 8NC3

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The German government has signalled perhaps the most significant step change in decades in its thinking about the country’s role in European security and regarding its long-standing commitment to fiscal prudence. Late on 4 March, the parties set to form the next governing coalition announced an agreement that will see a major increase in federal and state government funding on defence and infrastructure. 

Below, we outline the nature of the proposals put forward and provide a round-up of analyst views on the impact of the announcement. 

MNIPOLITICALRISK-GermanDefenceStimulus-AnalystViews .pdf

• RES 4: 112-23+1.618 proj of the Jan 13 - Feb 7 - Feb 12 price swing
• RES 3: 112-18  2.0% 10-dma envelope
• RES 2: 112-13  1.500 proj of the Jan 13 - Feb 7 - Feb 12 price swing 
• RES 1: 112-01/02 High Mar 4 / 1.382 proj of Jan 13-Feb 7-12 swing
• PRICE:‌‌ 111-06 @ 16:34 GMT Mar 5 
• SUP 1: 110-23/110-00   Low Feb 28 / High Feb 7        
• SUP 2: 109-21   50-day EMA and a key near-term support 
• SUP 3: 108-21   Low Feb 19 
• SUP 4: 108-03+ Low Dec 12 and a bear trigger  

Treasury futures traded to a fresh cycle high Tuesday, reinforcing current bullish conditions. The contract has pierced resistance at 111-22+, Dec 3 ‘24 high. A clear break of this level would strengthen a bullish theme and open 112-02 and 112-13, Fibonacci projection points. Note that the daily trend condition is overbought, a pullback would be considered corrective and allow the overbought set-up to unwind. Firm support is at 110-00, the Feb 7 high.