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Jan-13 11:09
SX7E (17th Feb) 105c, bought for 3.30 in 24k vs 12.24k at 106.10
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BONDS: Bund targets the December low
Dec-14 11:01
- Bund targets yesterday's low at 139.77, also the lowest print seen in December.
- Below the latter, sees 139.62 Low Nov 29.
- BTP/Bund spread is widest since the 30th November, with next resistance coming at 190.05bps.
- Continued tightening in the Tnote/Bund spread, now 6bps, and eyeing 150.00bps next.
OUTLOOK: Price Signal Summary - Gold Bull Cycle Extends
Dec-14 10:55
- On the commodity front, trend signals in Gold remain bullish and Tuesday’s gains have reinforced this condition. The yellow metal traded through resistance at 1810.0 yesterday, the Dec 5 high, to confirm a resumption of the uptrend. This signals scope for a climb towards $1842.7, the 50.0% retracement of the Mar - Sep bear leg. On the downside, support to watch lies at $1765.9, the Dec 5 low.
- In the Oil space, WTI trend signals are bearish. However, the latest recovery and yesterday’s move higher, suggests the contract remains in a short-term corrective cycle. Attention is on resistance at $77.52, the 20-day EMA - a key short-term hurdle for bulls - where a break would signal scope for a stronger recovery. On the downside, the bear trigger lies at $70.08, the Dec 9 low.
EUROZONE DATA: IP Contraction Softer than Headline Data Suggests
Dec-14 10:50
According to MNI calculations based on Eurostat weightings, headline October eurozone industrial production masks a softer decline.
- Irish readings are again distorting the aggregate print largely due to high volatility related to transfer pricing by multinational corporations. October saw a -10.7% m/m plunge following a September +7.1% m/m jump.
- As such, October euro area industrial production likely recorded a softer -1.2% m/m contraction when excluding volatile Irish data. This is 0.8pp higher than the -2.0% m/m fall published in today's headline data, signalling a less drastic slowdown in euro area production.
- On the other hand, there is a large element of supply-side bottlenecks easing allowing production to remain elevated, notably in the automotive sector -- also noted in UK data earlier this week.
- Backlogs boosting production implies the underlying health of the industry is worse than data suggests. These outstanding orders are declining sharply, as flagged by PMI surveys over the past months.
- The October industrial production data follows weak September growth (when excluding Irish data) and appears set to drag substantially on eurozone growth into Q4.
Source: MNI / Eurostat
