EUROZONE DATA: PPI Y/Y Slightly Higher Than Expected As Energy Base Effects Fade

Late on Friday Goldman Sachs noted that they “think domestic fundamentals played a limited role in the recent sell-off in European rates, and instead believe the shifting macro assessment out of the U.S. remains the primary driver of duration.”

• “While we do see downside to European yields, some stabilisation in global duration is likely necessary for outright longs to work.”
• “Economic divergence between the Euro area and the U.S. - which we think is the right fundamental view - is increasingly priced.”
• They see “paths for European rates to rally absent a bullish impulse from the U.S., but those rely on either a further deterioration in Euro area fundamentals, or a shift in reaction function from the ECB.”

SFIH5 95.40/95.30/95.20p fly, bought for 1.5 in 2k.

WTI futures traded higher last week as the contract extended recent gains. A stronger reversal to the upside has exposed key short-term resistance at $76.41, the Oct 8 high. A firm resistance at $71.97, the Nov 7 high, has been breached, strengthening a bullish theme. On the downside, a reversal lower would expose support at the 20-day EMA, at $70.49. This average is seen as a key short-term support. A bear threat in Gold remains present despite the latest recovery, The yellow metal traded sharply lower on Dec 18 and the move undermines a recent bull theme. A resumption of weakness would open key support at $2536.9, the Nov 14 low. The first firm support to watch is $2583.6, the Dec 19 low. On the upside, a resumption of gains would instead signal scope for a climb towards resistance at $2726.2, the Dec 12 high.

• WTI Crude down $0.14 or -0.19% at $73.83
• Natural Gas up $0.29 or +8.5% at $3.637
• Gold spot down $8.18 or -0.31% at $2631.91
• Copper up $1.45 or +0.36% at $409.1
• Silver up $0.13 or +0.44% at $29.7411
• Platinum up $9.26 or +0.99% at $948.25