EU TECHNOLOGY: IBM: Q225 Results        

• The Tnotes/Bund spread falls below the June low, given the heavy pressure in German Bond futures following the German Finance Ministry's announcements.
• The 195bps level has provided some good resistance throughout the Month of April, May and June.
• Next Immediate support comes at 175.47bps, the 6th May low, but a better area of interest is seen further out, down to ~167.4bps.

(Chart source: Bloomberg Finance LP/MNI).

• In the equity space, the trend condition in S&P E-Minis is unchanged, it remains bullish and this week’s strong start reinforces current conditions. Short-term resistance and a bull trigger at 6128.75, the Jun 11 high, has been pierced. A clear break of this level would confirm a resumption of the uptrend that started Apr 7. This would open the 6200.00 handle, a Fibonacci projection. Key support remains at the 50-day EMA - at 5913.50. A clear break of it would signal a reversal.
• A short-term bear cycle in EUROSTOXX 50 futures remains intact, however, the recovery from Monday’s low appears to be a potential reversal. The contract has traded above the 20- and 50-day EMAs. A clear break of both averages would strengthen a reversal theme and signal scope for a stronger recovery. This would open 5486.00, the May 20 high and bull trigger. On the downside, a breach of yesterday’s 5194.00 low would reinstate a bearish theme.

A sizeable rebellion of backbench Labour MPs means that the gov't is set to be forced into changes to its planned benefits reform. One hundred and eight Labour backbenchers have signed up to a reasoned amendment from Treasury select committee chair Dame Meg Hillier (Lab Co-op, Hackney South and Shoreditch) that, if passed, would give MPs the majority to vote down the welfare reform bill in its entirety at the second reading on 1 July. 

• Steven Swinford at The Times sums up the situation for the gov't on X: "Rachel Reeves yesterday said explicitly that there will be ‘no u-turn’ on welfare reforms. Starmer has said similar over and over again. [...] But with 100+ Labour MPs now in open revolt, how sustainable is that? [...] As on winter fuel payments is something that Starmer and Reeves said was an absolute certainty going to have to be dropped? And if Starmer can’t get welfare reform over the line with a majority of 165, is any prime minister ever going to be able to curb Britain’s rising welfare bill? Worth also bearing in mind that we have a huge - and unfunded - pledge this morning to raise defence spending from 2.3% to 3.5% by 2035. Something will have to give. The Autumn budget is looking more difficult by the day. Tax rises look inevitable."
• Another forced U-turn would risk exposing major fractures in the Labour gov't, which, while holding a large majority, is proving an increasingly unwieldy alliance.