RUSSIA: Kremlin Spox-Prisoner Exchange w/US 'Unlikely To Be Turning Point'

• RES 4: 1.0630 High Dec 06
• RES 3: 1.0513 50-day EMA
• RES 2: 1.0437/58 High Jan 6 / High Dec 30
• RES 1: 1.0374 20-day EMA
• PRICE: 1.0201 @ 10:32 GMT Jan 11
• SUP 1: 1.0178 Intraday low 
• SUP 2: 1.0138 1.764 proj of the Sep 25 - Oct 23 - Nov 5 price swing
• SUP 3: 1.0122 2.0% 10-dma envelope
• SUP 4: 1.0031 2.000 proj of the Sep 25 - Oct 23 - Nov 5 price swing    

The trend condition in EURUSD remains bearish and recent short-term gains have proved to be a correction. Friday’s move lower resulted in a print below 1.0226, the Jan 2 low. The pair has also traded lower today. The break of 1.0226 confirms a resumption of the downtrend and marks an extension of the price sequence of lower lows and lower highs. Sights are on 1.0138 next, a Fibonacci projection. Resistance to watch is 1.0458, Dec 30 high.

Core global FI markets remain under pressure.

• Bearish technicals and rallying energy prices weigh early this week.
• Bund futures as low as 130.57 before a recovery to 130.70.
• German yields 2-3bp higher, 5s lead the move.
• 10s near their July high (2.642%), that level equates to 130.50 in futures today.
• Weakness in core global FI & European equities promotes EGB spread widening
• BTP/Bunds ~5bp wider at 122.5bp, eying the early December closing high (123.3bp). 3- & 7-Year BTP supply passed smoothly.
• OATs ~2bp wider vs. Bunds, 85bp caps for now. ’24 cycle closing highs at 88.4bp lie above. Participants eye French PM Bayrou’s inaugural speech to parliament, due Tuesday.
• GGBs widen by ~4.5p vs. Bunds, unwinding some of their early ’25 outperformance.
• No real sign of underperformance for 10-Year RAGBs this morning, despite the negative ratings outlook move from Fitch on Friday as Austrian fiscal & political headwinds are well-documented. Spread to Bunds +1bp.
• Little of note in ECB speak from Lane, Rehn & Vujcic. Vujcic seemingly remains more cautious when it comes to cuts, while Lane & Rehn stuck to the central ECB view.
• ECB-dated OIS price 88bp of cuts through year-end vs. ~92bp late Friday.
• Cross-market cues eyed for the remainder of the day, with little of note on the European calendar.