OUTLOOK: Price Signal Summary - EUROSTOXX50 Fresh All-Time Contract High
- In the equity space, S&P E-Minis have traded higher this week. The recovery undermines a recent bearish threat and attention turns to the next resistance at 6162.25, the Jan 24 high. Clearance of this level would expose key resistance at 6178.75, the Dec 6 ‘24 high. A move above this hurdle would resume the primary uptrend. On the downside, initial key support has been defined at 6014.00, the Feb 10 low. A break would be viewed as a bearish development.
- EUROSTOXX 50 futures continue to appreciate. The move higher this week confirms once again, a resumption of the uptrend that started on Nov 21 ‘24. Moving average studies are in a bull mode set-up too, highlighting a dominant uptrend. Sights are on a major resistance at 5525.00, the March 2000 all-time high. This level has been pierced. A clear break of it would highlight a key bullish break and open 5552.90, a 2.764 projection of the Dec 20 ‘24 - Jan 8 - 13 price swing. Support to watch is 5283.40, the 20-day EMA.
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US INFLATION: December CPI Preview And Detailed Analyst Expectations
Re-upping our US CPI preview (PDF) ahead of the release in just over 2 hours (0830ET).
- A summary of analyst expectations is in the image below (as noted earlier, consensus doesn't appear to have changed after PPI).
EQUITIES: EU Bank large outright Put buyer
SX7E (21st Mar) 145p, bought for 2.5 in 24k vs 6.48k at 153.80.
IRELAND: Draft Programme For Gov't Coming Today As Coalition Agreement Reached
RTE reports that a new draft programme for gov't is set to be published later today following parliamentary meetings of Fianna Fáil (FF) and Fine Gael (FG) this afternoon. On 14 Jan RTE reported that an agreement on forming a new governing coalition had been reached involving FF, FG and a number of independent lawmakers (TDs). RTE: "Seven TDs from the Regional Independents are set to support the next government as part of an agreement with Fianna Fáil and Fine Gael. Meanwhile, Independent TDs Michael and Danny Healy-Rae have also reached an agreement to support the incoming government."
- The participation of nine independent TDs in total, added to FF's 48 seats and FG's 38 will give the gov't a comfortable majority with 95 seats in the 174-member Dáil Éireann (lower house).
- Party members from FF and FG are expected to approve the programme for gov't by 19 Jan. This will set the stage for the election of a Taoiseach (PM) once the Dáil reconvenes on Wednesday 22 January. FF leader Micheál Martin, as head of the largest party, will become Taoiseach first under the agreement. It is expected that he will hold the office until well into 2027.
- Under the 2020-24 agreement, FF and FG held the Taoiseach's office for an equal amount of time. However, FF's sizeable seat advantage over FG means Martin is expected to remain in office for over half the parliamentary term.
- RTE also reports that Eurogroup President Paschal Donohoe, who served as an FG finance minister from 2017-22, is set to return to the position under the new gov't.
Chart 1. Dáil Éireann, Seats
Source: oireachtas.ie, MNI
