CZECHIA: Cabinet Talks Continue, Still No Clarity on Key Ministerial Roles
- Government negotiations are set to continue Wednesday, with ANO now set to shift their negotiations toward policy priorities surrounding transportation, education and the structure of interior ministries.
- While these negotiations take place, ministers will be prepping for a meeting between President Pavel and ANO's Babis on October 27th at Prague castle - at which the two leaders will discuss the ongoing cabinet negotiations and further steps, according to Novinky.
- So far, reports suggest that coalition negotiations are going well, with "no significant obstacles". SPD leader Okamura would not be drawn on whether Ukraine aid would continue, nor if SPD's Zuna would formally take the role of defence minister.
- Meanwhile, the outgoing cabinet is set to hold their weekly meeting at 1000 local time (0900BST), at which they may discuss Fiala's proposals to submit a fresh budget plan in early November.
- The finance ministry auction 2034, 2036 and 2037 bonds today at midday local time (1100BST).
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BTP TECHS: (Z5) Bull Trigger Remains Exposed
- RES 4: 122.56 0.764 proj of the Apr 9 - May 8 - 14 price swing (cont)
- RES 3: 121.88 0.618 proj of the Apr 9 - May 8 - 14 price swing (cont)
- RES 2: 121.00 Round number resistance
- RES 1: 120.74 High Aug 5 and the bull trigger
- PRICE: 119.73 @ Close Sep 19
- SUP 1: 119.06/118.36 Low Sep 4 / 3
- SUP 2: 118.00 Round number support
- SUP 3: 117.70 2.236 proj of the Aug 5 - 12 - 14 price swing
- SUP 4: 117.36 2.500 proj of the Aug 5 - 12 - 14 price swing
The primary trend condition in BTP futures is unchanged, the set-up remains bullish. The strong rally that started Sep 3 reinforces this theme and signals the end of the recent corrective pullback between Aug 5 - Sep 3. Key resistance and the bull trigger is 120.74, the Aug 5 high. A break of this hurdle would confirm a resumption of the uptrend. Key support has been defined at 118.36, the Sep 3 low.
RATINGS: Italy Upgraded At Fitch, France Downgraded At DBRS
Sovereign rating reviews of note from after hours on Friday include:
- Fitch upgraded Italy to BBB+; Outlook Stable
- Moody's affirmed Poland at A2; Outlook changed to Negative from Stable
- S&P affirmed Ireland at AA; Outlook Positive
- Morningstar DBRS upgraded Cyprus to A, Stable Trend
- Morningstar DBRS downgraded France to AA, Trend Changed to Stable
- Morningstar DBRS confirmed Norway at AAA, Stable Trend
- Morningstar DBRS confirmed Finland at AA (high), Stable Trend
- Morningstar DBRS confirmed the United States of America at AAA, Stable Trend
- Scope Ratings affirmed the Czech Republic at AA-; Outlook Stable
GILT TECHS: (Z5) Trading Below Its Recent Highs
- RES 4: 92.30 High Aug 7
- RES 3: 92.06 High Aug 14
- RES 2: 92.00 Round number resistance
- RES 1: 91.14/82 20-day EMA / High Sep 11
- PRICE: 90.71 @ Close Sep 19
- SUP 1: 90.65 Low Sep 2
- SUP 2: 90.31/89.36 Low Sep 4 / 3
- SUP 3: 89.22 1.618 proj of the Aug 21 - 27 - 28 price swing
- SUP 4: 89.00 Round number support
Gilt futures gapped lower on Friday extending the pullback from recent highs. Despite the sell-off, a bull cycle remains intact and a recent rally highlights a stronger corrective cycle. Note that the move higher has allowed an oversold trend condition to unwind. Price has breached initial firm resistance at 90.84, the Aug 28 and 29 high. A resumption of gains would open 92.06, the Aug 14 high. Initial support lies at 90.65, the Sep 5 low.
