EUROZONE DATA: Jan Credit Data Suggests Restrictiveness Waning, But DE/FR Weak

Monday’s move lower in WTI futures marks an extension of the current corrective cycle. The 20-day EMA has been breached and attention turns to support around the 50-day EMA, at $72.16. A clear break of the 50-day average would suggest scope for a deeper retracement. On the upside, a reversal higher would focus attention on $79.48, the Apr 12 ‘24 high and a key resistance. Despite yesterday’s pullback, Gold is trading closer to its recent highs. A bull cycle is in play and the breach of resistance at 2726.2, the Dec 12 high, reinforces current conditions. Sights are on $2790.1, the Oct 31 all-time high. A break of this hurdle would confirm a resumption of the primary uptrend. On the downside, the first key support to watch is $2671.6, the 50-day EMA. A reversal lower and a breach of this average would reinstate a bearish threat.

• WTI Crude up $0.34 or +0.46% at $73.5
• Natural Gas down $0.04 or -1.08% at $3.65
• Gold spot up $3 or +0.11% at $2743.4
• Copper up $2.1 or +0.5% at $425.1
• Silver down $0.12 or -0.4% at $30.09
• Platinum down $2.13 or -0.22% at $947.69

A bull cycle in the Eurostoxx 50 futures contract remains intact and the move lower from last Friday’s high, is considered corrective. A deeper retracement would allow an overbought trend condition to unwind. Moving average studies remain in a bull-mode set-up highlighting a dominant uptrend. The first important support to watch is 5097.39, the 20-day EMA. A resumption of the uptrend would open 5298.50, a Fibonacci projection. The S&P E-Minis contract initially traded lower Monday extending the pullback from last Friday’s high. Key short-term support to watch lies at 5961.75, the Jan 16 low (pierced). For now, the move down appears corrective, however, a clear breach of 5961.75 would strengthen a bearish threat and signal scope for a deeper retracement, towards 5943.94, a Fibonacci retracement. Key resistance is 6178.75, the Dec 6 high.

• Japan's NIKKEI closed lower by 548.93 pts or -1.39% at 39016.87 and the TOPIX ended 1.17 pts lower or -0.04% at 2756.9.
• Across Europe, Germany's DAX trades higher by 85.17 pts or +0.4% at 21367.16, FTSE 100 higher by 46.86 pts or +0.55% at 8549.93, CAC 40 up 19.85 pts or +0.25% at 7926.43 and Euro Stoxx 50 up 14.69 pts or +0.28% at 5203.14.
• Dow Jones mini up 14 pts or +0.03% at 44916, S&P 500 mini up 16.5 pts or +0.27% at 6062.25, NASDAQ mini up 107 pts or +0.5% at 21361.5.

Italy will hold a BTP Short Term and BTPei auction this morning. The new 2.55% Feb-27 BTP Short Term (ISIN: IT0005633794) will be launched for E2.75-3.00bln. Alongside this, E1.00-1.25bln of the 1.50% May-29 BTPei (ISIN: IT0005543803) and E1.00-1.25bln of the 1.80% May-36 BTPei (ISIN: IT0005588881) will be on offer.

• The launch size of the BTP Short Term is a little smaller than the previous on-the-run 3.10% Aug-26 BTP Short Term, which saw a E3.5bln launch in July last year.
• The four re-openings of this BTP Short Term between August and November attracted an average bid-to-cover ratio of 1.67x, with amounts issued of between E2-2.75bln. The last re-opening attracted a bid-to-cover ratio of 1.81x for the E2bln issued.
• The 2-year BTP/Schatz (using previous on-the-run lines) spread has tightened since mid-January (alongside 10-year counterparts), last at 28.3bps from a closing high of 37bps on Jan 13.
• On Thursday, Italy will hold an auction to sell 5/10-year BTPs and a CCTeu. On offer will be the on the-run 5-year 3.00% Oct-29 BTP alongside two off-the-run BTPs in the 10-year area (following the new 10-year syndication earlier this month) and the Apr-33 CCTeu.
• The 2.55% Feb-27 BTP Short Term will likely be re-opened on Feb 25.
• Timing: Results will be available shortly after the bidding window closes at 10:00GMT / 11:00CET.