HUNGARY: Orban Says Hungary in Talks on ‘Sizable’ US Investment Deal
- Speaking on state radio this morning, Prime Minister Orban said Hungary is in negotiations with the Trump administration on a “sizable” economic deal that will involve US investments. Orban agreed with Donald Trump on this before his inauguration, he said.
- The Prime Minister also said Hungary will take steps to ensure that all aid funding coming from the United States to NGOs and media critical of the government would be revealed, referring to the USAID programmes, Reuters report. He said the moment has come to "eliminate these foreign networks" now that Trump's administration is considering merging the USAID into the State Department.
- There are no major data releases scheduled for today. Looking ahead to next week, CPI data due Tuesday provides the key domestic risk event. The NBH noted last month that “the temporary rise in inflation is expected to continue in January 2025,” which would likely justify another ‘hold’ decision at the Feb 25 MPC meeting.
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GILTS: Light Bull Steepening, Supply & Global FI Cues Eyed
Gilt futures off opening highs, with core global FI markets seeing some light selling pressure in recent trade.
- Contract last +10 at 91.50.
- Bearish technicals intact, initial support at yesterday’s low (91.31), while initial resistance comes in at yesterday’s high (92.13)
- Yields 1-2bp lower across the curve, light bull steepening.
- 10s last 4.67%, focus on 4.70% next, yesterday’s high was 4.687%.
- 30s topped out at 5.25% yesterday, which represents the highest level seen since ’98.
- 10-Year gilt/Bunds ~2bp tighter on the day, last ~216bp.
- There isn’t anything of note on the UK data calendar today, which will leave focus on swelling global supply and U.S. data.
- On the supply front, the DMO will return to market today, looking to sell GBP4.25bln of the 4.375% Mar-30 gilt.
- This morning has already seen the DMO confirm a syndicated re-opening of the 4.375% 2040 gilt, planned for w/c January 20 "subject to demand and market conditions".
USDCAD TECHS: MA Studies Remain In A Bear-Mode Set-Up
- RES 4: $34.903 - High Oct 23 and the bull trigger
- RES 3: $33.125 - High Nov 1
- RES 2: $32.338 - High Dec 12 and a key resistance
- RES 1: $30.489 - 50-day EMA
- PRICE: $30.054 @ 08:08 GMT Jan 8
- SUP 1: $28.748 - Low Dec 19
- SUP 2: $28.446 - 76.4% retracement of the Aug 8 - Oct 23 bull cycle
- SUP 3: $27.686 - Low Sep 6
- SUP 4: $26.451 - Low Aug 8
A bear cycle in Silver that started Oct 23 remains in play - for now - and recent gains appear corrective. The metal has recently breached support at $29.642, the Nov 28 low. The break lower opens $28.446, a Fibonacci retracement. Note that moving average studies are in a bear-mode position highlighting a dominant downtrend. Key resistance has been defined at $32.338, the Dec 12 high. A break of this level would signal a reversal.
USDCAD TECHS: Bull Flag
- RES 4: 1.4676 2.0% 10-dma envelope
- RES 3: 1.4539 3.382 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 2: 1.4508 3.236 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 1: 1.4467 High Dec 19
- PRICE: 1.4360 @ 08:04 GMT Jan 8
- SUP 1: 1.4326/4280 20-day EMA / Low Jan 6
- SUP 2: 1.4232 Low Dec 17
- SUP 3: 1.4163 50-day EMA
- SUP 4: 1.4011 Low Dec 5
USDCAD traded lower Monday. The trend set-up remains bullish and the move down is considered corrective. The latest pause in the uptrend appears to be a flag formation - a bullish continuation signal. Note too that MA studies are in a bull-mode position, highlighting a dominant uptrend. Sights are on 1.4508 next, a Fibonacci projection level. 1.4326, the 20-day EMA, has been pierced. A clear break of the EMA would open 1.4163, the 50-day EMA.
