LATAM: Summary – February 12
- The BCCh minutes on Wednesday will provide further guidance on the interest rate outlook in Chile, after the unanimous decision to keep rates unchanged last month. Brazil IBGE services volume and Argentina wages, both for December, also cross, as well as Colombia January consumer confidence figures.
- In the G10, the US inflation print takes focus, with markets anticipating a moderation in inflationary pressures for January. However, the release could be muddier than usual due to the concurrent posting of annual revisions for inflation. Central bank speak also comes through thick and fast, as Powell faces a second appearance in front of lawmakers on top of appearances from BoE's Greene, ECB's Nagel and Fed's Bostic.
- The JPY's overnight step lower stands out among G10 FX, headlined by USD/JPY's rally back above Y153.00, closing in on the first major resistance at 154.46. Clearance here would be bullish. Meanwhile, GBP/USD's strong rally off yesterday's lows means the pair has now retraced over 50% of the post-BoE decision losses, putting the price within 100 pips of last week's highs.
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EU-BOND SYNDICATION: New 3-year / 3.375% Oct-54 tap: Mandate
"The EU has mandated Barclays, BNP Paribas, J.P. Morgan, LBBW and NatWest Markets as Joint Lead Managers for its upcoming EUR Fixed Rate RegS Bearer dual tranche transaction comprising a new long 3-year benchmark line due 4th July 2028 and an increase of EU 3.375% benchmark due 5th October 2054 (EU000A3K4EY2). No further group. The transaction will be launched tomorrow, subject to market conditions. "
MNI comments
- The new 3-year maturing 4 July 2028 was one of the three issues highlighted as likely to launch in H1. We pencil in a tranche size of E5-7bln (we have not seen an EU-bond tranche larger than that since March 2022 - but there is a possibility we go a bit higher with the large H1 EU funding plan).
- The 3.375% Oct-54 tap we pencil in between E4-6bln (possibly partly depending upon the size of the new 3-year).
- We look for a combined E9-13bln total transaction size.
US: SOFR FIX - 13/01/25
SOFR - Bloomberg.
- 1mth 4.30624 0.0037
- 3mth 4.30198 0.01497
- 6mth 4.27941 0.03483
- 12mth 4.24478 0.06645
EUROSTOXX50 TECHS: (H5) Retracement Mode
- RES 4: 5097.00 High Oct 14
- RES 3: 5080.00 High Oct 15
- RES 2: 5068.13 0.764 proj of the Nov 21 - Dec 9 - 20 price swing
- RES 1: 5054.00 High Jul 8
- PRICE: 4950.00 @ 10:47 GMT Jan 13
- SUP 1: 4935.71 50-day EMA
- SUP 2: 4829.00 Low Dec 20 and key short-term support
- SUP 3: 4800.87 76.4% retracement of the Nov 21 - Dec 9 bull cycle
- SUP 4: 4775.00 Low Nov 29
A bull cycle in the Eurostoxx 50 futures contract remains intact and for now, the latest pullback appears corrective. Initial support to watch is 4935.71, the 50-day EMA. A clear break of this EMA would undermine a bullish theme and signal scope for a deeper retracement. For bulls, resistance at 5040.00, Dec 9 high, has recently been pierced. A clear break of it would resume the bull cycle that started on Nov 21 and open 5068.13, a Fibonacci projection.
