OUTLOOK: Price Signal Summary - EUROSTOXX50 Resistance Holds For Now

• In the equity space, a bear threat in the S&P E-Minis contract remains present despite the most recent gains. Attention is on 5866.00, the Dec 20 low and a key S/T support. Clearance of this level would strengthen a bearish theme. Initial firm resistance is 6107.50, the Dec 26 high. A breach of this hurdle would highlight a bull reversal and open key resistance at 6178.75, the Dec 6 high.
• A bull cycle in the EUROSTOXX 50 futures contract remains intact. Yesterday’s strong rally highlights a reversal of the recent corrective pullback and attention is on resistance at 5040.00, the Dec 9 high. Clearance of this level would confirm a resumption of the bull cycle that started on Nov 21 last year. Initial firm support lies at 4921.43, the 50-day EMA.

• Size: E7bln (in line with MNI expectations and same as 2023/24 10-year syndis)
• Spread set earlier at MS+66bps (guidance was +68bps area)
• Books in excess of E88bln (ex JLM interest)
• Maturity: 22-June-2035
• Settlement: 14-January-2025 (T+5)
• Coupon: Annual ACT/ACT, short first to 22-June-2025
• ISIN: BE0000363722
• Bookrunners: BNPP (DM/B&D) / CACIB / HSBC / JPM / MS
• Timing: Books closed at 10:00GMT / 11:00CET; allocations and pricing to follow

From market source

Italian December flash HICP was 1.4% Y/Y, two tenths below consensus and down from 1.5% in November. The lower-than-expected print combined with Franch undershooting estimates was a large reason for the Eurozone-wide inflation print tilting back in line with consensus at 2.4% Y/Y after upside risks from the German and Spanish data that had already been released (yesterday and Dec 30 respectively).

The decrease in Italian headline HICP reflected Y/Y moderation in most of the main sub-components:

• Services slowed to 2.9% Y/Y from 3.2% in Nov, ending the year with a notable moderation having stabilised between 3.1-3.4% Y/Y through Jan-Nov 2024. It should however still be viewed against pre-pandemic averages close to 1.0%.
• Non-energy industrial goods (core goods) were estimated to be flat on an annual basis in December after 0.4% Y/Y in Nov.
• Food, alcohol, and tobacco HICP slowed to 2.4% Y/Y from 2.8% in November.
• Energy deflation meanwhile continued but to less extent, with -2.9% Y/Y after -5.4% Y/Y in Nov, helping limit the decline seen in headline HICP inflation compared to November's Y/Y.