US-RUSSIA: Russia's Shoigu Confirms US Invited To Security Conference

• Existing home sales fell a seasonally adjusted -3.3% M/M in January to extend the -5.0% seen in December.
• The CREA’s composite price index inched 0.1% M/M lower whilst Y/Y growth edged higher from -0.2% to 0.2% Y/Y for its first positive reading since Mar 2024.
• The 4.2 months of supply followed three months averaging 3.8. Whilst it was the highest since August, it’s still below the long-term average of 5 months which has helped limit house price declines. 

• 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: 6162.25 High Jan 24                 
• PRICE: 6155.75 @ 14:08 GMT Feb 18 
• SUP 1: 6075.54 20-day EMA           
• SUP 2: 6014.00/5935.50 Low Feb 10 / 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 continue to climb and the contract maintains a firmer tone. Attention is on resistance at 6162.25, the Jan 24 high. Clearance of this level would expose the 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 highlight a bearish development. 

Some more detailed excerpts from Cipollone’s speech, covering the balance sheet’s impact on the monetary policy stance and its transmission:

• “An evolving economic landscape suggests that balance sheet policies could be increasingly useful as monetary policy instruments”
  • “First, the non-bank financial sector has grown considerably over time and is becoming increasingly relevant in the funding of the real economy”.
  • “Second, geopolitical fragmentation means that the global economy is becoming more shock prone and subject to higher levels of uncertainty”
• “The decline in excess liquidity warrants careful monitoring, as it could exert additional tightening pressures on financial and financing conditions, potentially exceeding the intended policy stance”.
• “The ECB’s balance sheet has been reduced at a faster pace than those of central banks”…” much of this decline can be attributed to banks’ repayments of TLTRO loans”
• “Our balance sheet policy instruments continue to be a crucial item in our toolbox. The expectation that we will use them if necessary protects the smooth transmission of our monetary policy and reduces the likelihood that we will need to use these tools in the first place.
• “Moreover, in an environment of heightened uncertainty, even in the context of excess liquidity, we need to remain prudent and be ready to step in should another shock emerge. We should maintain the flexibility to swiftly expand liquidity facilities if stressful conditions arise”.