AMERICAS OIL: Ecuador OCP Crude Oil Pipeline Restarts After Repairs

• The strong 1% bounce off the lows for cable is weighing on EURGBP, which sits 0.2% lower on the session. This price action is largely seen as corrective given the bullish theme which remains intact for the cross. The recent breach of the 50-day EMA highlighted a stronger reversal, signalling scope for a climb towards 0.8592 and 0.8624, the April 21 high. Initial support is at the 20-day EMA is at 0.8488.
• Having seen the rally in EURGBP lose some steam around 0.8550, ING still think the momentum can remain generally bullish on the pair, and expect a break above 0.860 in the near term. Above 0.8710, they would be looking back at 4Q23 levels on the chart, which look too elevated unless the BoE delivers an aggressive easing cycle from here.
• Goldman Sachs note EURGBP has overshot their GSBEER model implied estimates slightly over the past few weeks, which could pose a tactical headwind for another leg higher from here. While GS expect an eventual drift higher in EURGBP over the next year, they think we will likely continue to see choppy but range-bound moves in the cross over the coming months, around their three-month target of 0.85.
• It is a quieter week for data in the UK, placing the focus on the plethora of BOE speakers scheduled.

"The EUROPEAN UNION, rated AAA (Fitch) / Aaa (Moody's) / AA+ (S&P) / AAA (Scope), announces its intention to issue up to € 70 billion of EU-Bonds in the second half of 2025, to be complemented by short-term funding (EU-Bills)." Source: The EU press office

As noted earlier, this is the bottom end of our E70-90bln rough estimated range. Further details to follow when the full plan is available.

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