EM LATAM CREDIT: Latin America Medium Beta Sovereign Bond Commentary

Wednesday's U.S. rates options flow included:

• SFRZ5 95.62/95.37ps, bought for 1.75 in 60k total (pit and screen)
• SFRM5 95.50p, bought for half in 20k

• RES 4: 0.8494 High Aug 26 ‘24        
• RES 3: 0.8474 High Jan 20 and a key resistance
• RES 2: 0.8428/8450 High Mar 18 / 11 and the bull trigger
• RES 1: 0.8395 High Mar 24      
• PRICE: 0.8365 @ 16:47 GMT Mar 26 
• SUP 1: 0.8333 Low Mar 26
• SUP 2: 0.8321 61.8% retracement of the Mar 3 - 11 bull leg 
• SUP 3: 0.8391 76.4% retracement of the Mar 3 - 11 bull leg 
• SUP 4: 0.8241 Low Mar 3 and a key support 

EURGBP has traded lower before a mid-session rally. Wednesday’s strength off the intraday low highlights a possible reversal. A strong daily close Wednesday would strengthen the bullish significance of today’s bounce. Note that MA studies are in a bull-mode position. This suggests that the pullback from the Mar 11 high, has been a correction. Resistance to watch is 0.8395, the Mar 24 high. Key near-term support lies at 0.8333, today’s intraday low.   

• Crude prices are trading higher today amid signs of rising tensions in the Middle East. Supply-side risks remain from increased US sanctions against Iran and tariff threats for countries importing Venezuelan oil.
• WTI May 25 is up by 1% at $69.7/bbl.
• Despite recent gains, a bearish trend condition in WTI futures remains intact. However, a key pivot resistance at $69.14, the 50-day EMA, has been pierced. A clear breach of this hurdle would strengthen a bullish theme and open $70.98, the Feb 25 high.
• For bears, a reversal lower would expose the bear trigger at $64.85, the Mar 5 low.
• Meanwhile, copper has risen further today amid reports that US tariffs on copper imports could be coming earlier than expected, within the next several weeks.
• Copper is currently up by 0.5% at $523/lb, having reached a record high at $537 earlier in the session.
• While copper prices are technically overbought, history shows they can tolerate extended periods of stronger prices for a longer duration than the current rally.
• From a technical perspective, a bull cycle in copper futures remains in play, with price testing resistance at $537.30, the 2.5 projection of the Jan 2 - 17 - Feb 3 price swing earlier. A break of this level would open round number resistance at $540 next.
• Spot gold is unchanged today at $3,019/oz, as the yellow metal consolidates below last week’s record high at $3,057.
• A clear uptrend in gold remains intact, with sights on $3,079.2 next, a Fibonacci projection.