EU CREDIT UPDATE: EUR Market Wrap
- 2y/10y bunds closed +2bp at 2.23%/2.53% - intraday tights were driven by a bid in equities in the AM but the move unwound over the session against a quiet macro calendar and in-line policymaker comments. USTs closed +2bp/+4bp at 4.3%/4.61%.
- Main/XO ended -0.7bp/-3bp at 53.4bp/287bp while €IG was -0.8bp at 0.95% (Corps -0.5bp at 0.9%, Fins -1.4bp at 1.01%, €HY -2bp at 2.99%). $IG was -0.6bp at 0.78% (Corps -0.5bp at 0.77%, Fins -0.6bp at 0.8%, $HY -2.5bp at 2.56%).
- SX5E/SPX futures closed +0.8%/+0.6% at 5223pts/6121pts. €IG movers included Netflix Inc (+10%), Amphenol Corp (+7%), Intermediate Capital Group PLC (+7%), Siemens Energy AG (+7%), Barry Callebaut AG (-8%), easyJet PLC (-5%), Schlumberger NV (-5%).
- SX5E/SPX futures are -0.2%/-0.1% this morning. Overnight team flagging stable USD/USTs with Trump’s interview on Fox largely domestic-focussed. China unveiled more support for local equities, but local indices are off session highs.
- Later US jobless claims, January Kansas Fed manufacturing, Canadian November retail sales and preliminary January euro area consumer confidence print.
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AUDUSD TECHS: Trend Structure Remains Bearish
- RES 4: 0.6550 High Nov 25
- RES 3: 0.6482 50-day EMA
- RES 2: 0.6429 High Dec 12
- RES 1: 0.6337/6370 Low Dec 11 / 20-day EMA
- PRICE: 0.6239 @ 06:21 GMT Dec 24
- SUP 1: 0.6199 Low Dec 19
- SUP 3: 0.6158 1.236 proj of the Sep 30 - Nov 6 - 7 price swing
- SUP 3: 0.6100 Round number support
- SUP 4: 0.6045 1.500 proj of the Sep 30 - Nov 6 - 7 price swing
The trend needle in AUDUSD continues to point south and the pair is trading closer to its recent lows.Recent weakness maintains the price sequence of lower lows and lower highs. Note that moving average studies are in a bear-mode position too, highlighting a dominant downtrend. Scope is seen for an extension towards 0.6158 next, a Fibonacci projection. Initial firm resistance to monitor is 0.6370, the 20-day EMA.
EUROZONE ISSUANCE: EGB Supply
No auctions, syndications or redemptions are expected to be held in the upcoming week. Coupon payments are negligible.
For a summary of 2025 funding plans see the PDF here: EZ241224.pdf
BTP TECHS: (H5) Retracement Mode
- RES 4: 123.83 1.764 proj of the Nov 7 - 15 - 18 price swing
- RES 3: 123.43 1.618 proj of the Nov 7 - 15 - 18 price swing
- RES 2: 122.85/123.34 High Dec 12 / 11 and the bull trigger
- RES 1: 121.28 20-day EMA
- PRICE: 120.16 @ Close Dec 23
- SUP 1: 120.10 Low Dec 19
- SUP 2: 119.67 61.8% retracement of the Nov 7 - Dec 11 bull cycle
- SUP 3: 119.11 Low Nov 18
- SUP 4: 118.80 76.4% retracement of the Nov 7 - Dec 11 bull cycle
A corrective cycle in BTP futures has resulted in a pullback from its recent highs and the Dec 19 gap lower highlights potential for a continuation near-term. The contract has breached the 20-day EMA and sights are on 119.67, a Fibonacci retracement point. Key resistance and the bull trigger has been defined at 123.34, the Dec 11 high. Initial firm resistance is seen at 121.28, the 20-day EMA.
