SECURITY: German Gov't Spox-EU Proposals On Defence 'Go In Right Direction'
Mar-05 11:11
A spokesperson for the German gov't has said that the European Commission's proposals with regard to defence spending "go in the right direction". This comes after two significant announcements from Brussels and Berlin on 4 March with regard to defence and security spending objectives, and how it can be paid for.
- European Commission President Ursula von der Leyen presented the 'ReArm Europe' plan, which includes the used of the national escape clause from the Stability and Growth Pact to enable member states to boost defence spending without risking entering the excessive deficit procedure, EUR150B in EU loans to go towards military expenditure, and allowing the use of cohesion funding for defence spending.
- In Germany, the leaders of the centre-right Christian Democratic Union (CDU, Friedrich Merz) and Christian Social Union (CSU, Markus Söder) and the co-leaders of the centre-left Social Democratic Party (SPD, Lars Klingbeil and Saskia Esken) announced in an evening press conference that rules around defence spending would be loosened to exempt expenditure above 1% of GDP from the limits of the constitutional debt brake.
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FOREX: USDJPY 100 Pips Off Overnight Highs, Bearish Threat Remains
Feb-03 11:05
- JPY resilience standing out on Monday as we approach the NY crossover, and USDJPY extends its pullback from the overnight highs to around 100 pips, back below 155.00. Price action is likely reflective of Japan being relatively well insulated to tariff rhetoric, but also its historical safe haven status gaining traction across the European session amid the broad weakness for major equity indices consolidating.
- The Jan 27 move down for USDJPY highlighted a bearish technical threat and significantly, initial firm resistance has remained intact at 156.75, the Jan 23 high. Overall, the pair has breached the 50-day EMA and a trendline drawn from the Sep 16 ‘24 low, signalling scope for a move towards 152.55, a Fibonacci retracement point.
- With the USD index remaining around 1% in the green, yen strength is most notable in the crosses. Perhaps the clearest barometers of global risk sentiment, it is notable that AUDJPY (-1.23%) has dipped through the December lows at 95.50 and NZDJPY (-1.52%) stands out, having pushed to a near six-month low below 0.8600. For both crosses, the early August carry unwind lows remain the clear medium-term targets.
OUTLOOK: Price Signal Summary - S&P E-Minis Bear Threat Remains Present
Feb-03 11:02
- In the equity space, the S&P E-Minis contract contract has started the week on a bearish note. The gap lower today and a breach of support at 5948.00, the Jan 27 low, strengthens a bearish threat and cancels - for now - a recent bullish theme. An extension down would open 5892.37, 76.4% retracement of the Aug 5 - Dec 6 bull leg. Initial resistance is at 6057.75, the Jan 31 low and a gap high on the daily chart. Clearance of this level would reinstate a bullish theme.
- A sharp reversal lower in the EUROSTOXX 50 futures contract signals the end of the recent bull run - for now - and the start of a corrective cycle. Price has gapped lower and traded through the 20-day EMA, at 5152.76. A resumption of weakness would pave the way for a move towards the 50-day EMA, at 5050.12, the 50-day EMA. On the upside, key resistance and the bull trigger has been defined at 5327.00, the Jan 31 high.
STIR: SOFR FIX - 03/02/25
Feb-03 11:00
| SOFR FIX - Source BBG/CME | ||
| 1M | 4.31268 | -0.0004 |
| 3M | 4.30313 | 0.00088 |
| 6M | 4.25107 | 0.00276 |
| 12M | 4.16774 | 0.00744 |
