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Germany, France, the ESM, Portugal and the EU are all due to sell bills this week. We look for issuance at first round operations of E14.5bln, around half of the E29.1bln raised last week.
EURGBP last week traded above the key resistance at the Feb 25 high of 0.8406. This completed a 100% retracement of the most recent downleg between Feb 25 - Mar 7 and strengthens a short-term bullish condition. The move higher signals scope for an extension towards the next resistance at the early February highs of 0.8478. Initial support is seen at 0.8317, the Mar 9 low.
EUROSTOXX 50 futures remain vulnerable however a corrective cycle is still in play following last week’s recovery. The move higher is allowing an oversold condition to unwind. Resistance to watch is at 3817.30, the 20-day EMA. This has been probed and a clear break would suggest scope for a stronger recovery with the 50-day EMA at 3985.70. The latter EMA is a key resistance. The broader trend direction is down, the bear trigger is 3380.00.