EGBS: Bunds Off Lows On Russia-Ukraine News, But Iran Ceasefire Concerns Remain
Reports of a potential Russia-Ukraine peace deal generated a small bid in Bund futures, but RXM6 remains a touch below yesterday’s settlement levels. Zooming out, Bunds have continued to retrace Tuesday night’s gap higher, with the fragility of the reported US-Iran ceasefire agreement becoming increasingly apparent. Futures are currently -2 ticks at 125.40, down from a high of 126.64 early Wednesday. Trend signals remain bearish.
- Reports from the Middle East suggest the Iranian negotiating team has not yet arrived in Pakistan for talks, amid continued disagreements around whether Lebanon is included in the ceasefire agreement.
- Meanwhile, the Russia-Ukraine news comes with caveats, with the source declining to “say how a possible compromise would look like on territory, the thorniest issue at the talks”.
- The German curve has seen a fairly parallel 3.5-4.0bp shift higher today. 2s10s and 10s30s are off late-March lows, but still remain much flatter than pre-Iran war levels.
- This morning’s Italian supply was well digested, but the 10-year BTP/Bund spread remains 3.5bps wider on the session at 78.5bps.
- In data, Italian February industrial production was weaker than expected, meaning all four major Eurozone economies saw soft prints before the Iran war started.
Figure 1: Bund Futures Since March 26 (Source: Bloomberg Finance L.P)
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
MNI EXCLUSIVE: MNI discusses potential changes to the BOJ's baseline scenario
MNI discusses potential changes to the BOJ's baseline scenario. On MNI Policy MainWire now, for more details please contact sales@marketnews.com
COMMODITIES: Gold's Short-Term Bullish Theme Intact Following This Week's Gain
A volatile impulsive bull wave in WTI futures remains intact. From a technical analysis standpoint alone, the sharp pullback from Monday’s high is not a surprise, given that the uptrend was in an extreme overbought position. The move down is allowing this overbought condition to unwind. A key support zone to monitor is $73.64 - $67.06, the area between the 20- and 50-day EMAs. A clear break through this area would signal a possible trend reversal. Gold is in consolidation mode and continues to trade below $5419.11, the Mar 2 high. A S/T bullish theme is intact following recent gains. The metal has cleared all key retracement points of the sharp sell-off between Jan 29 - Feb 2. This strengthens the short-term bullish theme and signals scope for an extension towards key resistance and the bull trigger at $5595.5, the Jan 29 high. Initial firm support to watch lies at $5095.9, the 20-day EMA.
- WTI Crude up $3.75 or +4.49% at $87.43
- Natural Gas up $0.09 or +2.88% at $3.106
- Gold spot down $4.57 or -0.09% at $5186.95
- Copper down $11.05 or -1.86% at $583.95
- Silver down $1.14 or -1.29% at $87.1745
- Platinum down $25.48 or -1.16% at $2177.97
EQUITIES: Recent Rebound for EuroStoxx Still Considered Corrective
The sharp rebound in EuroStoxx 50 futures from Monday’s low is for now, considered corrective and this is allowing an extreme oversold trend condition to unwind. Key S/T resistance to watch is 5932.54, the 50-day EMA. A clear break of this average is needed to signal a possible reversal. A resumption of the bear leg would suggest scope for an extension towards 5500.00, the Nov 21 ‘25 low. A clear breach of this support would strengthen the bear cycle. A sharp bounce in S&P E-Minis on Monday appears corrective - for now - and this has allowed an oversold trend condition to unwind. The recent breach of 6751.50, the Feb 6 low, confirms a range breakout and highlights a stronger short-term bear threat. A resumption of weakness would open 6583.00, the Nov 21 ‘25 low and a key medium-term support. Initial firm resistance is 6890.53, the 50-day EMA.
- Japan's NIKKEI closed higher by 776.98 pts or +1.43% at 55025.37 and the TOPIX ended 34.57 pts higher or +0.94% at 3698.85.
- Elsewhere, in China the SHANGHAI closed higher by 10.296 pts or +0.25% at 4133.433 and the HANG SENG ended 61.14 pts lower or -0.24% at 25898.76.
- Across Europe, Germany's DAX trades lower by 384.03 pts or -1.6% at 23572.24, FTSE 100 lower by 105.29 pts or -1.01% at 10301.28, CAC 40 down 76.3 pts or -0.95% at 7976.5 and Euro Stoxx 50 down 74.11 pts or -1.27% at 5760.59.
- Dow Jones mini down 159 pts or -0.33% at 47580, S&P 500 mini down 13.25 pts or -0.2% at 6773, NASDAQ mini down 47.5 pts or -0.19% at 24931.5.
