HYBRIDS: Arkema (AKEFP): Hybrid Redemption

• RES 4: 113-09   76.4% retracement of the Nov 25 - Dec 10 bear leg
• RES 3: 113-00+ 61.8% retracement of the Nov 25 - Dec 10 bear leg
• RES 2: 112-27+ High Dec 5 
• RES 1: 112-22+/23   High Dec 16 / 11 
• PRICE:‌‌ 112-15+ @ 16:48 GMT Dec 16
• SUP 1: 111-29   Low Dec 10 and the bear trigger
• SUP 2: 111-19   1.236 proj of the Oct 17 - Nov 5 - 25 price swing
• SUP 3: 111-11   1.382 proj of the Oct 17 - Nov 5 - 25 price swing 
• SUP 4: 111-00   Round number support 

A bear theme in Treasuries remains intact. Today’s volatile activity resulted in a brief test above the 20-day EMA, at 112-20. The outlook remains bearish. A continuation lower would refocus attention on key support at 111-29, the Dec 10 low. Clearance of this level would confirm a resumption of the bear leg and open 111-19, a Fibonacci projection. On the upside, a clear breach of 112-23, the Dec 12 high would strengthen a S/T bull cycle. 

From a regional perspective, European trade with China remains in focus as pushback from the bloc continues; just over the weekend, the EU's justice commissioner floated plans on a crackdown on “very dangerous” products sold on online platforms including China’s Shein and Alibaba.

• October data does little to suggest the reported EC strategy of "derisking" its economic relationship with China will take a sudden turn. A "Fortress Europe" remains a possibility looking at current reports.
• Eurozone exports to China were E15.8bln in October (swda), -5.1% M/M and indeed the lowest monthly value since May 2020. Imports from China meanwhile decreased 4.1% M/M at E44.5bln, the lowest since July 2024.
• This means longer-term trends on EZ-China trade are intact: Exports to China remain on a downtrend while imports have been volatile but remain well of their highs.
• Recapping the European stance on the matter, officials seem cautious about tools aimed at tackling subsidies and dumping when a key potential upside driver of Eurozone imports from China are China’s own weak domestic demand and overcapacity.
• Taking the data at face value, these risks have not materialized (yet) - having said that, October data, again, will do little to question these beliefs.
• The EU could come closer to a joint China strategy at an informal summit in February, MNI understands. 

The October fall in the Eurozone merchandise trade surplus was heavily driven by chemicals exports falling back to August levels, after a one-off jump in September. That tallies well with Eurozone net exports roughly stabilizing in real terms over the medium term.

• The Eurozone merchandise trade surplus fell to E14.0bn on a swda basis back in October after a downward revised E18.6bn (initially E18.7bn) in September which had been the highest monthly surplus since February.
• This means that as a 12-month rolling % of GDP, the Eurozone goods trade surplus appears to stabilize roughly around the 1.0% mark, a level reached in Q2 '24.
• The deterioration in the monthly trade balance vs September comes as exports declined 4.6% M/M, outstripping a decline in imports of 3.3%.
• Across categories, exports fell predominantly in the "manufactured goods" category, driven by 20.1% M/M fall in "chemicals and related products" after a jump of similar magnitude in September. Elsewhere, food, drinks and tobacco exports exhibit a bit of a downtrend recently, with a 0.8% M/M fall in October representing the fourth sequential fall in a row.
• As for imports, broad-based sequential October declines look a bit spurious, with food, drinks and tobacco down 3.7% M/M (-2.0% Sep), raw materials at -4.1% (-2.8 Sep), mineral fuels, lubricants and related materials at -10.9% (-2.6% Sep), and manufactured goods at -4.4% (2.0% Sep).
• The questions here come from the miscellaneous category which surged 135.6% M/M but there is a high chance this will be downwardly revised over the coming months, allocating the imports correctly. Nevertheless, the headline -3.3% M/M figure was also the weakest since April.