RUSSIA: Kremlin Spox-Prisoner Exchange w/US 'Unlikely To Be Turning Point'
Kremlin spox Dmitry Peskov has spoken to reporters following the release of US citizen Marc Fogel as part of a prisoner exchange on 11 Feb. Peskov confirms that one Russian citizen was released from a US jail as part of the deal. After meeting Fogel at the White House US President Donald Trump claimed, “I think this … could be a big, important part in getting the war over.”. However, Peskov pushed back saying "Such agreements are unlikely to be a turning point...These are gradual steps to increase mutual trust, which is now at a low point."
- Peskov says he has 'no information' regarding Fox News host Sean Hannity's claim that the prisoner exchange followed a three-and-a-half hour meeting between President Vladimir Putin and Trump's special envoy for the Middle East Steven Witkoff.
- Separately, regarding the situation of the war in Ukraine and speculation that Trump's peace plan could be unveiled at the Munich Security Conference later this week, Peskov says Russia "will never discuss" swapping Ukrainian territory it controls for the area Ukraine holds in the Kursk region. Says "Ukrainian forces will be driven out of Kursk".
- While Russian forces make steady but very costly advances in eastern Ukraine, Kyiv has maintained its increasingly effective long-range drone attacks on Russian hydrocarbon facilities. Reports from 11 Feb claim that the Saratov refinery in southern Russia was hit by Ukrainian drones for the second time in a month.
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EURUSD TECHS: Bearish Trend Sequence Intact
- RES 4: 1.0630 High Dec 06
- RES 3: 1.0513 50-day EMA
- RES 2: 1.0437/58 High Jan 6 / High Dec 30
- RES 1: 1.0374 20-day EMA
- PRICE: 1.0201 @ 10:32 GMT Jan 11
- SUP 1: 1.0178 Intraday low
- SUP 2: 1.0138 1.764 proj of the Sep 25 - Oct 23 - Nov 5 price swing
- SUP 3: 1.0122 2.0% 10-dma envelope
- SUP 4: 1.0031 2.000 proj of the Sep 25 - Oct 23 - Nov 5 price swing
The trend condition in EURUSD remains bearish and recent short-term gains have proved to be a correction. Friday’s move lower resulted in a print below 1.0226, the Jan 2 low. The pair has also traded lower today. The break of 1.0226 confirms a resumption of the downtrend and marks an extension of the price sequence of lower lows and lower highs. Sights are on 1.0138 next, a Fibonacci projection. Resistance to watch is 1.0458, Dec 30 high.
GERMAN T-BILL AUCTION RESULTS: New 12-month Bubill
| Type | 12-month bubill |
| Maturity | Jan 14, 2026 |
| Allotted | E1.905bln |
| Previous | E2.46bln |
| Total sold | E3bln |
| Target | E3bln |
| Avg yield | 2.402% |
| Previous | 2.392% |
| Bid-to-cover | 3.22x |
| Previous | 2.89x |
| Bid-to-offer | 2.05x |
| Previous | 2.37x |
| Previous date | Nov 18, 2024 |
EGBS: Under Pressure, Spreads Wider
Core global FI markets remain under pressure.
- Bearish technicals and rallying energy prices weigh early this week.
- Bund futures as low as 130.57 before a recovery to 130.70.
- German yields 2-3bp higher, 5s lead the move.
- 10s near their July high (2.642%), that level equates to 130.50 in futures today.
- Weakness in core global FI & European equities promotes EGB spread widening
- BTP/Bunds ~5bp wider at 122.5bp, eying the early December closing high (123.3bp). 3- & 7-Year BTP supply passed smoothly.
- OATs ~2bp wider vs. Bunds, 85bp caps for now. ’24 cycle closing highs at 88.4bp lie above. Participants eye French PM Bayrou’s inaugural speech to parliament, due Tuesday.
- GGBs widen by ~4.5p vs. Bunds, unwinding some of their early ’25 outperformance.
- No real sign of underperformance for 10-Year RAGBs this morning, despite the negative ratings outlook move from Fitch on Friday as Austrian fiscal & political headwinds are well-documented. Spread to Bunds +1bp.
- Little of note in ECB speak from Lane, Rehn & Vujcic. Vujcic seemingly remains more cautious when it comes to cuts, while Lane & Rehn stuck to the central ECB view.
- ECB-dated OIS price 88bp of cuts through year-end vs. ~92bp late Friday.
- Cross-market cues eyed for the remainder of the day, with little of note on the European calendar.
