FED: Gov Barr Eyes Potential Inflationary Impact From Supply Chain Hit

• RES 4: 0.8800 Round number resistance      
• RES 3: 0.8781 2.236 proj of the Mar 3 - 11 - 28 price swing
• RES 2: 0.8768 High Nov 20 ‘23
• RES 1: 0.8738 High Apr 11 
• PRICE: 0.8553 @ 16:04 BST Apr 15 
• SUP 1: 0.8520/0.8482 Low Apr 10 / 20-day EMA 
• SUP 2: 0.8413 50-day EMA
• SUP 3: 0.8316 Low Mar 28 and a key near-term support   
• SUP 4: 0.8299 Low Mar 5

Despite the fade off highs, a bull trend in EURGBP remains intact. Note that a deeper retracement would allow a recent overbought trend condition to unwind. Support to watch lies at 0.8482, the 20-day EMA. Support at the 50-day EMA is at 0.8413. The area between these two averages represents a key support zone. For bulls, a resumption of gains would open 0.8781, a Fibonacci projection point.   

US President Donald Trump continues to receive poor polling numbers in surveys taken after his April 2 'Liberation Day' tariff announcement. Morning Consult reports: “Trump’s approval rating has slumped to 45%, the lowest point of his second term so far as Americans react to his trade policies, while 52% disapprove, tying last week’s record-high rating since he took office in January. For the first time since May 2021, more voters trust Democrats in Congress than their Republican counterparts to handle the economy (46% to 43%).”

• The Washington Post reports: “Even before the shock of price increases have hit shelves, Trump’s poll numbers have taken a hit. After entering March with narrowly positive ratings overall, the president now faces a disapproving citizenry, with worse ratings on the economy and even worse ratings on his tariffs.”

Figure 1: Expectations for the Economy Over the Next Year

Source: Washington Post

Gilts handily outperformed Bunds Tuesday.

• Softer-than-expected elements of the UK labour market report saw Gilts get off on the front foot across the curve.
• Gilts rallied into the close, potentially in anticipation of tomorrow's CPI data, unlike Bunds which were unmoved.
• On the day, the UK curve twist steepened with a notable rally at the short end, with Germany's bear steepening.
• Italy and Greece underperformed on the EGB periphery.
• Wednesday's data includes UK CPI - MNI's preview is here. And Thursday brings the ECB decision - preview here.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is up 0.7bps at 1.766%, 5-Yr is up 1.6bps at 2.09%, 10-Yr is up 2.2bps at 2.534%, and 30-Yr is up 3.8bps at 2.915%.
• UK: The 2-Yr yield is down 5.6bps at 3.962%, 5-Yr is down 4.3bps at 4.11%, 10-Yr is down 1.2bps at 4.648%, and 30-Yr is up 4.3bps at 5.427%.
• Italian BTP spread up 1.7bps at 118.2bps / Greek up 2.9bps at 92.4bps