EM LATAM CREDIT: Ecuador: IDB USD1bn Credit Line – Positive

Semafor reports, “A key fault line in American politics may be whether someone seeks out the news. According to a survey by Global Strategy Group…, people classified as “active” news consumers tended to be older cable news viewers, while “passive” consumers — people who let the news come to them — tended to be younger, to rarely watch live television, to be unvaccinated against COVID-19, or to consider themselves politically independent.”

• Will Jordan, one of the study’s authors, told Semafor, “This very potentially politically influential audience is disproportionately on these algorithm-driven social media platforms, and that’s where they’re increasingly getting their understanding and information about current events.”
• Still, active news consumption cut across party lines: 67% of “strong Democrats” and 64% of “MAGA Republicans” were active news consumers, compared to about 60% of voters overall, notes Semafor. 

Figure 1: How Americans Describe their News Habits

Source: Semafor, Global Strategy Group

European bonds broadly gained ground on Monday.

• Core EGBs and Gilts were pressured early by news of a potential China-US trade breakthrough over the weekend, spurring a broad risk-on move.
• But the sell-off petered out by late morning, with yields descending in orderly fashion throughout the rest of the session with no clear driver, ahead of month-end and the ECB decision/Eurozone data later this week.
• In a session with limited data, German IFO came in mixed (current assessment missed, expectations beat).
• On the day, the German curve twist flattened with the UK's bull flattening. Gilts performed overall, carrying through from last week's outperformance.
• OAT spreads moved largely in line with other semi-core EGBs despite a modicum of relief from Friday's lowering of France's outlook by Moody's, as opposed to a fall in the credit rating itself.
• Tuesday's schedule includes the ECB Bank Lending Survey and CPI expectations, though that's not expected to have any impact on the ECB's expected rate hold Thursday. Otherwise the week's highlight is the Eurozone October flash inflation round, with the ECB in its pre-meeting media blackout period. is on the quiet side in the UK (our weekly outlook is here).

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is up 0.4bps at 1.972%, 5-Yr is down 0.3bps at 2.228%, 10-Yr is down 1bps at 2.616%, and 30-Yr is down 1.7bps at 3.189%.
• UK: The 2-Yr yield is down 1.8bps at 3.781%, 5-Yr is down 1.9bps at 3.883%, 10-Yr is down 3bps at 4.402%, and 30-Yr is down 3.8bps at 5.181%.
• Italian BTP spread down 1.3bps at 77.7bps / French OAT down 0.7bps at 80.1bps  

• RES 4: 0.8835 High May 3 2023  
• RES 3: 0.8800 Round number resistance 
• RES 2: 0.8769 High Jul 28 and the bull trigger 
• RES 1: 0.8751 High Sep 25  
• PRICE: 0.8730 @ 16:14 GMT Oct 27
• SUP 1: 0.8683/8656 50-day EMA / Low Aug 10
• SUP 2: 0.8633 Low Sep 15 
• SUP 3: 0.8597 Low Aug 14 and key support 
• SUP 4: 0.8562 50.0% retracement May 29 - Jul 28 upleg

The underlying trend condition in EURGBP is unchanged, it remains bullish and the cross is trading above support. Attention is on key resistance at 0.8769, the Jul 28 high and bull trigger. A break of this hurdle would confirm a resumption of the uptrend. The first support to monitor lies at 0.8683, the 50-day EMA. It has recently been pierced, a clear break of this level would signal scope for a deeper retracement towards 0.8633, the Sep 15 low.