EU-RUSSIA: Kremlin-EU 'Shooting Itself In Foot' With Fertiliser Tariffs
May-22 10:31
Kremlin spox Dmitry Peskov, speaking to reporters regarding the EU's plans to enact 50% tariffs on Russian and Belarusian fertiliser imports from July, says, "The EU will therefore have more expensive fertilisers that are of lower quality." Adds, "Demand for nitrogen fertilisers is high...The Europeans, as usual, are shooting themselves in the foot".
- The European Parliament earlier approved in a 411-100 vote plans that will place duties on fertiliser imports from the two countries from July, with a sustained increase that intends to make their import economically unviable by 2028.
- The proposed tariffs are controversial to say the least, with farmers' groups arguing that the measures will cause mass bankruptcies in the sector as prices are pushed up.
- The rollover of sanctions on Russia has often faced Hungarian vetoes. For the fertiliser tariffs, a different approach has been taken to circumvent this.
- As EU Observer reports, "[...] seeing as the regulation was being decided by "ordinary legislative procedure", which meant votes in the EU Council and parliament, where pro-Russian opponents could be democratically sidelined. But if that seemed like a win-win for the EU's Russia hawks, they should beware of being too creative, according to attorneys dealing with sanctions law. "Using them [tariffs] as non-trade sanctions might be [legally] challengeable as an improper purpose and an illegitimate evasion of requirement for unanimity … I wonder if Russia's lawyers will challenge that [in the EU courts in Luxembourg]," said one British barrister."
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LOOK AHEAD: Tuesday Data Calendar: Fed Speakers, Richmond Fed Data, 2Y Note Sale
Apr-22 10:25
- US Data/Speaker Calendar (prior, estimate)
- 22-Apr 0830 Philadelphia Fed Non-Mfg Activity (-32.5, --)
- 22-Apr 0900 Fed Gov Jefferson, Economic Mobility Summit
- 22-Apr 0930 Philly Fed Harker, Economic Mobility Summit
- 22-Apr 1000 Richmond Fed Mfg Index (-4, -7)
- 22-Apr 1000 Richmond Fed Business Conditions (-14, --)
- 22-Apr 1130 US Tsy $70B 6W bill auction
- 22-Apr 1300 US Tsy $69B 2Y Note auction (91282CMY4)
- 22-Apr 1340 MN Fed Kashkari Speaks moderated discussion
- 22-Apr 1430 Richmond Fed Barkin fireside chat (no text, Q&A)
- 22-Apr 1800 Fed Gov Kugler on Mon/Pol Transmission (text, Q&A)
US 10YR FUTURE TECHS: (M5) Recent Gains Are Considered Corrective
Apr-22 10:20
- RES 4: 113-04 76.4% retracement of the Apr 7 - 11 bear leg
- RES 3: 112-12 61.8% retracement of the Apr 7 - 11 bear leg
- RES 2: 111-25 50.0% retracement of the Apr 7 - 11 bear leg
- RES 1: 111-01+/17+ 20-day EMA / High Apr 16
- PRICE: 110-21 @ 11:09 BST Apr 22
- SUP 1: 110-15/109-08 Low Apr 15 / 11 and the bear trigger
- SUP 2: 108-26+ 76.4% retracement of the Jan 13 - Apr 7 bull cycle
- SUP 3: 108-21 Low Feb 19
- SUP 4: 108-03+ Low Dec 12 ‘24 and a key support
Treasury futures have pulled back from last week’s highs. For now, recent gains are considered corrective and the bear cycle that started Apr 7, remains in play. The next resistance to watch is 111-25, 50.0% of the Apr 7 - 11 bear legsell-off. For bears, a resumption of weakness would refocus attention on 109-08, the Apr 11 low and the bear trigger. Clearance of this level would resume the downtrend.
OUTLOOK: Price Signal Summary - USD Downtrend Remains Firmly Intact
Apr-22 10:06
- In FX, the trend in EURUSD remains bullish and Monday’s cycle high reinforces current conditions and highlights a bullish start to this week’s session. The break higher maintains the price sequence of higher highs and higher lows and note that moving average studies are in a bull-mode position, signalling a continued dominant uptrend. The focus is on 1.1608 next, the Nov 9 2021 high. Key support is unchanged at the 20-day EMA, at 1.1140.
- The trend condition in GBPUSD remains up and Monday’s rally reinforces current conditions. The pair has recently breached key resistance at 1.3207, the Apr 3 high and a bull trigger. This highlights a resumption of the medium-term uptrend. Note that moving average studies are in a bull-mode position, signalling a dominant uptrend. Sights are on 1.3434 next, the Sep 26 ‘24 high. Support to watch is 1.3075, the 20-day EMA.
- The trend condition in USDJPY remains bearish and this week’s fresh cycle lows reinforce this condition. The extension down confirms a resumption of the downtrend and maintains the price sequence of lower lows and lower highs. Note too that moving average studies are in a bear-mode position highlighting a dominant downtrend. Sights are on 139.79 next, a 1.382 projection of the Feb 12 - Mar 11 - 28 price swing. The 1.50 projection is at 138.82. Initial firm resistance to watch is the 20-day EMA, at 145.25. First resistance is 142.25, the Apr 21 high.
