EM LATAM CREDIT: Brazil's Cosan 1Q 2025 Earnings Disappointing – Negative take

• RES 4: 165.43 High Nov 8        
• RES 3: 164.90 High Dec 30 ‘24 and a key medium-term resistance   
• RES 2: 164.55 High Jan 7
• RES 1: 163.55/164.19 High Apr 14 / High Mar 18 and the bull trigger 
• PRICE: 162.19 @ 16:06 GMT Apr 16 
• SUP 1: 161.05/158.30 50-day EMA / Low Apr 7 and key support   
• SUP 2: 157.02 76.4% retracement of the Feb 28 - Mar 18 bull cycle  
• SUP 3: 155.60 Low Low Mar 4  
• SUP 4: 154.80 Low Low Feb 28  

Short-term weakness in EURJPY appears corrective and trend conditions remain bullish. Key short-term support has been defined at 158.30, the low on Apr 7. A break of this level is required to signal scope for a deeper retracement. This would open 157.02, a Fibonacci retracement. For bulls, a resumption of gains would expose 164.19, the Mar 18 high and the bull trigger. Clearance of this hurdle would resume the uptrend.     

Tsy 5Y TIPS auction moved to 1130ET as Thursday sees an early pit close (1300ET) - Globex closes normal time while markets closed Friday for Easter Holiday

• US Data/Speaker Calendar (prior, estimate)
• 17-Apr 0830 Initial Jobless Claims (223k, 225k)
• 17-Apr 0830 Continuing Claims (1.850M, 1.870M)
• 17-Apr 0830 Housing Starts (1.501M, 1.420M), MoM (11.2%, -5.4%)
• 17-Apr 0830 Building Permits (1.459M, 1.450M), MoM (-1.0%, -0.6%)
• 17-Apr 0830 Philadelphia Fed Business Outlook (12.5, 2.0)
• 17-Apr 1130 US Tsy $85B 4W, $75B 8W bill auctions
• 17-Apr 1130 US Tsy $25B 5Y TIPS (91282CNB3)
• 17-Apr 1145 Feb Gov Barr fireside chat on cyber risks (text, Q&A)

German instruments outperformed UK counterparts at the short end, but vice versa at the long end Wednesday.

• European core instruments gained in initial morning trade, due in part fo softer-than-expected UK CPI data and some concerns over China-US trade tensions.
• However, risk assets recovered following the publication of a Bloomberg sources piece casting more soothing tones ("China Open to Talks If US Shows Respect"), pushing Bunds and Gilts to the weakest levels of the day.
• Bunds and Gilts would retrace higher, and close near the middle of the session's ranges. On the day, the German curve bull flattened to through the 10Y tenor (a poor auction weighed on the 30Y segment), with the UK's twist flattening.
• Periphery / semi-core EGB spreads were mixed.
• Thursday's highlight is the ECB decision - MNI's preview is here. The ECB is widely expected to cut its three key rates by 25bp this week, taking its deposit rate to 2.25%. As MNI reported in a sources piece today, the Statement could adjust its statement to emphasise that rates are at the upper end of its range of estimates of neutral ("MNI SOURCES: ECB Likely To Adjust Or Remove 'Restrictive'")

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is down 1.8bps at 1.748%, 5-Yr is down 2.9bps at 2.061%, 10-Yr is down 2.5bps at 2.509%, and 30-Yr is down 0.1bps at 2.914%.
• UK: The 2-Yr yield is up 1.2bps at 3.974%, 5-Yr is down 1.7bps at 4.093%, 10-Yr is down 4.5bps at 4.603%, and 30-Yr is down 6.7bps at 5.36%.
• Italian BTP spread up 0.5bps at 118.7bps / Spanish down 0.5bps at 70.1bps