EM CEEMEA CREDIT: Kosmos Energy (KOS): Guidance $ 350mn 5Y Nordic Bond

• RES 4: 121.33 High Oct 21 and a key resistance area 
• RES 3: 121.37 High Nov 13 
• RES 2: 121.24 High Nov 26 
• RES 1: 120.34/77 Intraday high / High Dec 3   
• PRICE: 120.28 @ 08:07 GMT Dec 17
• SUP 1: 119.54 Low Dec 12           
• SUP 2: 119.13 Low Dec 10 and the bear trigger 
• SUP 3: 118.00 Round number support
• SUP 4: 118.84 2.000 proj of the Nov 13 - 20 - 26 price swing 

Gains in BTP futures appear corrective. However, the contract has traded above initial resistance at 120.17, the Nov 20 low. A continuation higher would signal scope for an extension towards 120.77, the Dec 3 high. On the downside, a reversal lower would refocus attention on key support at 119.13, the Dec 10 low and a bear trigger. Clearance of this level would confirm a resumption of the downtrend.

Some upside exposure sought in recent trade:

• TYF6 113.50 calls paper paid 0-03 on ~4K over a few clips
• TYG6 114.00 calls paper paid 0-10 on 2.5K over a couple of clips

Risks to tomorrow’s ECB decision are becoming increasingly more balanced, with the EUR front-end fading a degree of recent hawkish repricing. ECB-dated OIS now price just 3bps of hikes the end of next year, down from an extreme of 10bps last Wednesday. 

• Primary focus for tomorrow remains on the updated macroeconomic projections and the balance of risks to inflation and growth. Analysts expect upward revisions to both GDP and core HICP projections.
• We expect a repeat of a data-dependent and meeting-by-meeting approach, with no pre-determined path.
• MNI’s full ECB preview is here
• Markets still judge the next move in ECB rates to be a hike, with the ESTR 1y1y rate at 2.09% (versus an overnight rate of 1.93%).  Improving regional growth momentum and the expected impulse from higher German fiscal spending have raised the bar to near-term cuts.  
• Intraday, Euribor futures are +0.5 to +3.0 ticks through the blues, with dovish spillover from the softer-than-expected UK inflation report.