UKRAINE: US Signals Major Shift In Stance On The War
MNI's Political Risk team has published an article looking at the significant news developments concerning European and Ukrainian security over the past 24 hours. February 12 marked potentially the most consequential day for European geopolitics since Russia launched its full-scale invasion of Ukraine almost three years ago. For the first time since Trump’s inauguration, the US outlined in stark detail how it views its position with regards to defending European security and the future of the war in Ukraine.
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EGB SYNDICATION: 10-year GGB: Final terms
- Spread set earlier at MS+102bp (guidance was MS+107bps area)
- Size: E4bln (top of the E3-4bln range MNI expected)
- Books in excess of E40.5bln (inc JLM interest)
- Maturity: 15 June 2035
- Settlement: 21 January, 2025 (T+5)
- ISIN: GR0124041758
Via Bloomberg / market source
OUTLOOK: Price Signal Summary - Trend Needle In Bunds Points South
- In the FI space, the trend in Bund futures remains bearish and last week’s extension reinforces this theme. The contract has cleared key support at 132.00, the Nov 6 low. The clear break of this level strengthens a bearish theme. Sights are on the 130.00 handle next. Key short-term resistance is at 133.03, the 20-day EMA. Gains would be considered corrective and allow an oversold condition to unwind. First resistance is at 131.71, the Jan 9 high.
- The trend condition in Gilt futures is unchanged, it remains bearish and last week’s fresh cycle lows reinforce current conditions. The latest move down also highlights an acceleration of the trend. Sights are on 88.87 next, a 2.764 projection of the Dec 20 -27 - Jan 2 price swing. Initial resistance is at 90.31, last Thursday’s intraday high. Resistance at the 20-day EMA, is at 91.86. The EMA is seen as an important hurdle for bulls.
US DATA: Small Business Optimism Soars Post-Election, But "Hard" Data More Mixed
The NFIB Small Business Optimism index rose to the highest level since October 2018 in December, up 3.4 points at 105.1. The improvement in optimism appears to be largely driven by the November election result (we saw a similar surge in December 2016 after Donald Trump's first election as president). Of note, "the net percent of owners expecting the economy to improve rose 16 points from November to a net 52% (seasonally adjusted), the highest since the fourth quarter of 1983."
- That included the highest percent of respondents seeing it as a good time to expand their business since Feb 2020, with multiyear highs for other readings including real sales volume expectations (Jan 2020) and inventory investment (Dec 2021).
- The "hard" components of the Optimism index (NFIB defines as: Job Creation Plans, Job Openings, Inventory Plans, Earnings, Capital Expenditure Plans) were more mixed than the surging "soft" categories (Expected Business Conditions, Outlook for Expansion, Expected Real Sales, Expected Credit Conditions, Inventory Satisfaction), though. Actual earnings and sales remained unchanged from a soft November.
- In the closely-watched employment categories, the survey showed that the net percent of owners raising worker compensation fell to the lowest since March 2021 (the % planning to raise compensation in the next 3 months was down 4 points from November). However, hiring plans hit the highest since May 2023. The inflation categories (actual changes and plans) were unchanged vs November.
- It's hard to get a gauge on the underlying signal on economic activity and inflation from the survey given the post-election exuberance, though overall this is a solid if mixed report.
