FRANCE DATA: Apr Flash PMI: Slowdown In New Export Order Declines A Relief
The French flash April services PMI was weaker than expected at 46.8 (vs 47.6 cons, 47.9 prior). Although still above February's 45.3 reading, the services index has been in contractionary territory for the last eight months. Manufacturing was a little better than expected at 48.2 (vs 47.9 cons, 48.5 prior), but has been below 50 for 27 months now. The composite reading was thus weaker than expected at 47.3 (vs 47.8 cons, 48.0 prior).
Services new orders fell sharply, particularly for domestic markets. Given the current tariff-related uncertainty, the slowdown in the decline of export sales is on the margin a relief, even as underlying demand conditions remain weak.
Key notes from the French release (translated via Google translate):
- "Service providers explain the decline in their activity by the decrease in new business, which has recorded their sharpest decline since November 2020".
- "The sharp acceleration in the decline in overall new business volumes observed in April reflects a sharp deterioration in demand in domestic markets. New orders from abroad recorded their smallest decline since August 2022"..."this slowdown in the decline in export sales is explained by a strengthening of demand from Africa and parts of Europe".
- "Employment continued to decline in the French private sector in April, with the drop in staff numbers reported during the month being modest but slightly higher than that recorded in March".
- "The decline in employment coincided with a deterioration in the outlook for activity in the French private sector. Although moderate, the degree of pessimism among businesses reached its highest level in nearly five years"..."this trend exclusively reflects a deterioration in confidence in the services sector".
- "A further easing of pressures on business costs, with prices paid posting their lowest inflation since December 2024. At the same time, strong competitive pressures led French private companies to reduce their selling prices for the first time in three months".
- "Data collected from April 9 to 22"
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BUNDS: A busy start for the Week
- A Gap lower for Bund Overnight, after Equities gapped higher on reports that the {us} White House is looking to narrow its tariffs on the 2nd April, although these are still fluid and unclear.
- Nonetheless, for the German contract, it is still trading within the 78 ticks range registered in the past 4 sessions.
- The small support moves up to 127.88, followed by 127.45.
- The Opening gap is up to 128.48, while the main initial resistance sits at 128.83.
- It is a busy start for the Week on the Data front, with prelim PMIs on both sides of the Pond.
- SUPPLY: EU €2.5bn 2030 (equates to 23.7k Bobl), €2.5bn 2044 (equates to 33.5k Bund) these could somewhat weigh into the bidding deadline.
- SPEAKERS: ECB Holzmann, Makhlouf, Escriva.
BRENT TECHS: (K5) Bear Trend Remains Intact
- RES 4: $79.98 - High Jan 15 and a reversal trigger
- RES 3: $76.78 - High Feb 11 and a bull trigger
- RES 2: $74.76 - High Feb 25
- RES 1: $72.82 - 50-day EMA and a pivot resistance
- PRICE: $72.17 @ 07:09 GMT Mar 24
- SUP 1: $68.33 - Low Mar 5 and the bear trigger
- SUP 2: $67.87 - Low Sep 10 ‘24 and a key medium-term support
- SUP 3: $66.36 1.618 proj of the Jan 15 - Feb 4 - 11 price swing
- SUP 4: $63.90 2.000 proj of the Jan 15 - Feb 4 - 11 price swing
Brent futures are trading at their recent highs. The recovery that started Mar 5 appears corrective and the primary trend direction remains down. Moving average studies are in a bear-mode position highlighting a dominant downtrend. A resumption of weakness would signal scope for a move towards $67.87, the Sep 10 2024 low. On the upside, initial firm resistance to watch is $72.82, the 50-day EMA.
BTP TECHS: (M5) Trend Outlook Remains Bearish
- RES 4: 120.39 High Feb 28
- RES 3: 119.31 Low Mar 4 and a gap high on the daily chart
- RES 2: 118.56 High Mar 5
- RES 1: 117.51 20-day EMA
- PRICE: 117.34 @ Close Mar 24
- SUP 1: 115.75 Low Mar 14 and the bear trigger
- SUP 2: 115.52 2.618 proj of the Feb 7 - 19 - 28 price swing
- SUP 3: 115.00 Round number support
- SUP 4: 114.81 3.000 proj of the Feb 7 - 19 - 28 price swing
Recent gains in BTP futures are considered corrective. Note that the trend has recently been in oversold territory and the latest bounce is allowing the condition to unwind. Resistance to watch 117.51, the 20-day EMA, ahead of 118.56, the Mar 5 high. A resumption of weakness and a breach of 115.75, the Mar 14 low, would confirm a continuation of the downtrend and open 115.52, a Fibonacci projection.
