BUNDS: BTP/Bund spread finds resistance ahead of 100.00bps

• RES 4: 6080.75 High Feb 26    
• RES 3: 6057.00 High Mar 3  
• RES 2: 6000.00 Round number resistance      
• RES 1: 5993.50 High May 20                                     
• PRICE: 5930.00 @ 07:26 BST May 21 
• SUP 1: 5837.25/5703.54 High Mar 25 / 50-day EMA                        
• SUP 2: 5455.50 Low Apr 30 
• SUP 3: 5355.25 Low Apr 24
• SUP 4: 5127.25 Low Apr 21 and a key support 

A bullish trend condition in S&P E-Minis remains intact and the contract is trading closer to its recent highs. An important resistance at 5837.25, the Mar 25 high and a bull trigger, has been cleared. This has strengthened the current bullish theme, and paves the way for a continuation near-term. Sights are on the 6000.00 handle next. Initial firm support to watch lies at 5703.54, the 50-day EMA.

• RES 4: $72.12 - High Feb 20  
• RES 3: $71.10 - High Apr 2 and key resistance
• RES 2: $65.82 - High Apr 4 2 and key resistance
• RES 1: $62.87/64.19 - 50-day EMA / Intraday high   
• PRICE: $62.71@ 07:23 BST May 21 
• SUP 1: $54.33 - Low April 9 and the bear trigger  
• SUP 2: $53.30 - 2.236 proj of the Feb 20 - Mar 5 - Apr 2 price swing
• SUP 3: $52.14 - 2.382 proj of the Jan 15 - Feb 4 - 11 price swing
• SUP 4: $50.00 - Psychological round number  

WTI futures have traded to a fresh short-term cycle high today and maintain a bullish theme. However, the recovery since Apr 9, still appears corrective. Key resistance to watch is $62.87, the 50-day EMA. It has been pierced, a clear break of it would highlight a stronger reversal. This would open $65.82, the Apr 4 high. For bears a reversal lower would refocus attention on $54.33, the Apr 9 low and bear trigger.

While there are tentative signs of an improvement in capacity utilisation in the industrial sector, economy-wide utilisation remains soft. This suggests there remains scope for more easing to support the economy, particularly from a fiscal/supply-side standpoint.  

• Swedish industrial capacity utilisation inched up to 88.0% in Q1 (vs 87.5% prior), but remains below the 2000-2019 average of 88.4%.
• The proportion of respondents citing insufficient demand as a reason for below-full capacity utilisation ticked up to 55.1% (vs 54.4% prior). Meanwhile, the proportion citing production disruptions rose to 26.1% (vs 23.2% prior).
• The Riksbank’s Resource Utilisation indicator, constructed using information available in survey data, instead fell to -0.79 in Q1 from -0.45 in Q4.
• The Riksbank projects capacity utilisation as measured by the output gap to continue rising back to neutral through 2027. Meanwhile, the employment gap is only expected to start trending higher from late 2025/early 2026.