BUNDS: Basis trade

SX5E (16th May) 4650p, bought for 2.4 in 5k.

• On the commodity front, Gold has recovered from its recent lows and this suggests the correction between Apr 22 - May 1, is over. A continuation higher would refocus attention on key resistance and the bull trigger at $3500.1, the Apr 22 high. Clearance of this level would confirm a resumption of the primary uptrend. Key short-term support has been defined at $3202.0, the May 1 low. A break of this level is required to signal scope for a deeper retracement.
• In the oil space, a medium-term bearish trend in WTI futures remains intact and short-term gains are considered corrective. The move down that started Apr 23 signals the end of the correction between Apr 9 - 23. That cycle higher allowed an oversold condition to unwind. Attention is on $54.67, the Apr 9 low and a bear trigger. Clearance of this level would resume the downtrend and open $53.72, a 2.236 projection of the Feb 20 - Mar 5 - Apr 2 price swing. Key resistance to watch is $64.12, the 50-day EMA.

New German Chancellor Friedrich Merz is set to travel to Brussels on Friday, 9 May, to mark Europe Day. He will meet with European Commission President Ursula von der Leyen, and the two will hold a joint press conference at 1100CET (0500ET, 1000BST). Merz will also hold talks with European Council President Antonio Costa and NATO Secretary-General Mark Rutte. 

• Much has been made of Merz's intention to take a much more active role on the foreign policy stage compared to his predecessor Olaf Scholz. This is exemplified by his visit to the two other Weimar Triangle nations on his first full day in office, with a clear attempt to put the three largest defence contributors in the EU front and centre of the Union's security and defence decision-making process.
• As Politico noted in February, this shift could put him if not at odds then at least in some form of competition with VdL, despite both hailing from the centre-right Christian Democratic Union. Politico: "What may look like paper-thin policy differences between the two could well turn into a full-blown power struggle as von der Leyen grapples with Merz’s increasing interest in the EU scene. Von der Leyen hews to the political center, championing green reforms, gender parity and keeping Europe’s internal borders open. Merz, by contrast, is a classic West German conservative who wants deregulation, has spoken out against parity in government, and has no problem shutting Germany’s borders to its neighbors."