EM CEEMEA CREDIT: ACKAF: 1Q25 results, margins seem to be bottoming

• In the FI space, Bund futures are trading at their recent highs. The latest recovery is considered corrective, however, the breach of the 20-day EMA and a print above resistance at 129.41, the Jan 14 low, strengthens a bullish theme and opens the 130.00 handle and 130.26, the 61.8% retracement of the Feb 28 - Mar 11 bear leg. Key short-term support to watch lies at 127.74, the Mar 25 low. Clearance of this level would highlight a reversal. Initial support lies at 128.47, the Mar 28 low.
• The short-term trend outlook in Gilt futures remains bearish, however, recent gains highlight a corrective cycle and this signals scope for a stronger recovery near-term. An extension would open 92.42, a trendline resistance drawn from the Mar 4 high. Clearance of this level would strengthen the short-term bull cycle. Key support and the bear trigger has been defined at 90.55, the Mar 27 low. First support lies at 91.59, the Mar 31 low.

Reuters reports comments from Italian PM Giorgia Meloni regarding the incoming imposition of US 'reciprocal' tariffs. Says "It is clear that the introduction of new US tariffs would hit Italian producers hard [...] I remain convinced that we must work hard to avoid at all costs a trade war. [...] I do not rule out adequate responses to US tariffs to defend our products." 

• Corriere Della Sera reports that according to insiders from Meloni's national-conservative Brothers of Italy (FdI), the strategy is to "Wait for "concrete decisions", avoid reactive failures and in the meantime negotiate and mediate. "We need to lower the tone and avoid an escalation that would be harmful to everyone", is the linchpin of Meloni's reasoning, which her supporters believe to be based on "common sense and pragmatism".
• One notable event will be US President JD Vance's (personal) visit to Italy on 18-20 April. Vance has requested a meeting with Meloni, and it is seen as likely that she presses the VP to loosen the grip of tariffs.
• However, it is seen as unlikely that she pursues Deputy PM Matteo Salvini's preferred option of advocating bilateral Italy-US talks, instead maintaining EU unity. The good relations between Vance and Salvini could throw up further obstacles for Meloni, given the notable tensions existing within the tripartite right-wing coalition (see 'MNI: Defence Spending Deepens Italian Government Fractures', 24 March). 

MBA composite mortgage applications continued to see another mild pullback as 30Y rates further stabilized around the 6.7% level. It masks new purchase applications at one of their highest levels in the past two years but activity is still subdued on a historical basis. 

• Composite applications dipped -1.6% (sa) last week after -2.0% the week prior and -6.2% before that, further chipping away at a 34% two-week increase in late Feb/early March.
• Once again, refis led the modest pullback (-5.6% after -5.3%) whilst new purchase applications saw their fifth consecutive weekly increase (most recently 1.5% after 0.7%).
• The 30Y conforming rate inched another 1bp lower to 6.70%, broadly consolidating around the 6.7% level for the past five weeks now having eased from a recent high of 7.09% in early January.
• It's a move that stoked a relatively modest uplift in activity when looking at broader trends, although activity is still subdued with new purchases at 61% of 2019 levels and refis at 41%.