EMERGING MARKETS: Price Signal Summary - Gold Bull Cycle Still In Play
Mar-19 12:03
- On the commodity front, a clear uptrend in Gold remains intact and this week’s resumption of the bull cycle reinforces current conditions. The yellow metal has cleared the psychological $3000.0 handle. Bulls have their sights on 3056.84 next, a 2.500 projection of the Nov 14 - Dec 12 - 19 price swing. Note that moving average studies are in a bull-mode position, highlighting a dominant uptrend and positive market sentiment. Key trend support is at $2832.7, Feb 28 low. First support lies at $2999.5, the Mar 18 low.
- In the oil space, a bearish condition in WTI futures remains intact and the latest round of gains appear corrective - for now. Recent weakness resulted in a breach of $69.80, the Feb 4 low. This confirmed a resumption of the downtrend that started Jan 15 and has paved the way for an extension towards $63.73 next, the Oct 10 ‘24 low. MA studies are in a bear-mode position, highlighting a dominant downtrend. Key pivot resistance to watch is $69.29, 50-day EMA.
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OUTLOOK: Price Signal Summary - Bund Futures Pierces A Trendline Support
Feb-17 11:59
- In the FI space, Bund futures are trading lower and in the process have pierced an important short-term support at 132.05, a trendline drawn from the Jan 15 low. A clear break of this line would strengthen a bearish theme and signal scope for an extension towards 131.59 next, the 61.8% retracement of the Jan 14 - Feb 5 bull leg. Below 131.59, lies 131.00, the Jan 25 low and a key support. For bulls, a resumption of gains would refocus attention on the bull trigger at 133.71, Feb 5 high.
- A bull cycle in Gilt futures remains in play and the latest pullback appears corrective for now. Last Thursday’s gains are a positive development and appears to be a bullish engulfing candle. A resumption of gains would open 94.35, the Feb 6 high and a bull trigger. Clearance of this level would open 94.75, the 76.4% retracement of the Dec 3 - Jan 13 bear leg. The next firm support to watch lies at 91.52, the Jan 24 low.
ESM ISSUANCE: 10-year Feb-35 syndication: Allocations out
Feb-17 11:52
- Size: E2bln WNG
- Books closed in excess of E8.5bln (ex JLM interest)
- Spread set earlier at MS+42bps (guidance was MS+45 area)
- HR 98% vs 2.50% Feb-35 Bund
- Maturity: 26 February 2035
- Coupon: Long first
- Settlement: 24 February, 2025 (T+5)
- ISIN: EU000A1Z99W5
- Bookrunners: BofA (DM/B&D), DB, Santander
- Timing: Hedge deacline 12:10GMT / 13:10CET
From market source
FOREX: EURJPY Resistance Remains Intact, Flash PMIs Eyed Friday
Feb-17 11:44
- Volatile JPY swings in recent weeks will have added difficulty in holding high conviction directional plays in the crosses. Despite this, bullish indicators for the Japanese yen remain prominent, and notably EURJPY’s technical resistance at the 50-day EMA has remained intact.
- The recent relief rally for the cross has allowed an oversold trend condition to unwind, and we remain -2.3% in 2025. Renewed weakness would refocus attention on 155.61, the Feb 10 low and bear trigger. Below here, the August and September lows from last year also mark important medium-term parameters, at 154.41 and 155.15 respectively.
- Bearish sentiment has been conveyed from analysts, where we recall SocGen favouring EURJPY shorts, describing the deterioration in Eurozone growth expectations relative to Japan as striking. Furthermore, we highlighted that TD Securities have recommended a short at 160.00, targeting a move to 152.95. Their short-term valuations suggest EUR/JPY trades rich, their models indicate positioning is clean and TD see BoJ and ECB outlooks as favouring the JPY, with March and May BoJ meetings being live.
- This week’s Eurozone calendar is headlined by the February flash PMIs (Friday), where uncertainty around the upcoming German election (Feb 23) may have an impact this month. A number of analysts have flagged the risk of post-covid residual seasonality inflating the PMIs in Q1 2025. As such, it may be important to not overreact to soft signals that a Eurozone cyclical recovery is firmly underway.
