OUTLOOK: Price Signal Summary - Corrective Cycle In Bunds Still In Play
Mar-28 12:16
- In the FI space, Bund futures are trading at their recent highs. For now, the latest move higher appears corrective. The climb has allowed an oversold trend condition to unwind. Price has breached resistance at the 20-day EMA, at 128.63. This exposes a more important resistance at 129.41, the Jan 14 low. First support to watch lies at 127.74, the Mar 25 low. A break of this level would be seen as an early reversal signal. The bear trigger is 126.53, the Mar 11 low.
- The short-term trend outlook in Gilt futures remains bearish and Thursday’s move lower reinforces current conditions. The contract has traded below a key short-term support at 90.71, the Mar 6 low. This confirms a resumption of the downtrend and paves the way for a move towards 90.49 next, the 1.618 projection of the Feb 6 - 20 - Mar 4 price swing. Initial resistance to watch is at 91.82, the 20-day EMA.
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GERMANY: SPD Co-Leader Confirms Contact w/Merz 'Soon' On Gov't Talks Timetable
Feb-26 12:05
Following his election as chair of the centre-left Social Democratic Party (SPD) faction in the Bundestag, SPD co-leader Lars Klingbeil has confirmed that he and leader of the centre-right Christian Democratic Union (CDU) Friedrich Merz have agreed to speak soon in order to set up a timetable for coalition talks. Says "It is the SPD's will to achieve a functioning government" adding "it is also up to Merz".
- Disagreements between the CDU and SPD are already evident over a 'minor inquiry' put forward by the Union. Titled "Political neutrality of state-supported organizations" it asks 551 questions of non-profits that receive state funding. Some of these groups mobilised against Merz following the CDU voting alongside the far-right Alternative for Germany (AfD) on a motion in January related to asylum and immigration.
- The leader of the SPD's youth wing (Jusos) in the state of Thuringia has demanded the Union withdraw the inquiry before the SPD begins coalition talks.
- The actions of Jusos should not be discounted in influencing SPD policy. In 2018, Jusos national chair Kevin Kühnert led a vocal (if eventually unsuccessful) opposition to the formation of a 'grand coalition' with the CDU then led by Angela Merkel.
- With the SPD coming off the back of its worst election result in over a century, and Merz sitting to the right of Merkel in terms of economic and social policy, a Jusos-led opposition to a 'grand coalition' could pose obstacles, given that the approval of SPD grassroots members will be needed for any coalition deal.
MNI: US MBA: MARKET COMPOSITE -1.2% SA THRU FEB 21 WK
Feb-26 12:00
- MNI: US MBA: MARKET COMPOSITE -1.2% SA THRU FEB 21 WK
EURIBOR OPTIONS: Put Spread Buyer
Feb-26 11:54
ERM5 97.8125/97.6875ps 1x2, bought for 1.75 in 20k.
