SNB: Quarterly Bulletin / Business Cycle Signals Provide Backdrop of SNB Cut

• HEADS UP! Tightening bias in the Tnotes/Bund spread continues today, and we are now looking to test the 2025 low situated at 194.5bps.
• While the next hurdle is still seen at the rounded 190.00bps level, better is seen towards ~184.61bps.

(Chart source: MNI/Bloomberg).

• RES 4: 6205.38 0.764 proj of the Jan 13 - 24 - Feb 3 price swing     
• RES 3: 6200.00 Round number resistance 
• RES 2: 6178.75 High Dec 6 and key resistance
• RES 1: 6088.20/6166.50 20-day EMA / High Jan 24                 
• PRICE: 6052.75 @ 14:26 GMT Feb 24 
• SUP 1: 6014.00 Low Feb 10           
• SUP 2: 5935.50 Low Feb 3
• SUP 3: 5892.37 76.4% retracement of the Aug 5 - Dec 6 bull leg
• SUP 4: 5842.50 Low Jan 14

S&P E-Minis faded sharply off their recent highs, last week. The move down appears corrective - for now - and a bullish theme is intact. Attention is on the key resistance at 6178.75, the Dec 6 ‘24 high. A break of this hurdle would resume the primary longer-term uptrend. On the downside, initial key near-term support has been defined at 6014.00, the Feb 10 low. A breach would highlight a bearish development and expose 5935.50, the Feb 3 low.

Goldman Sachs recommended going long NOKSEK late Friday, targeting 0.9700 with a stop-loss of 0.9475. 

• As noted earlier, they think “rising optimism for a quick fix to Europe looks overdone”.
• “When we examine our economists’ upside growth scenarios against the Euro’s typical responsiveness to activity data, we think the recent rally in the Euro and its satellites has moved a long way towards pricing a fairly optimistic outcome on several fronts”.
• Their models highlight that NOKSEK “responds to the relative policy outlook and commodity prices, both of which could see a reversal in fortunes if peace talks and European fiscal discussions are more drawn out”.