FRANCE: MoDem's Bayrou Lunches w/Macron After Barnier Gov't Ousted
Francois Bayrou, leader of the centrist MoDem party, is set to have lunch with President Emmanuel Macron at the Elysee Palace amid speculation about who could succeed Michel Barnier as prime minister. Bayrou has been a close ally of Macron since his first run for the presidency in 2017, and MoDem has sat in alliance with Macron's En Marche and Renaissance parties during both of his terms in office.
- Le Parisien: "“[Bayrou] is in the running,” confirms a Renaissance executive, immediately smiling: “In any case, he is still in the running.” Alongside Emmanuel Macron from the beginning, François Bayrou has nonetheless made his own voice heard when he disagreed with the head of state’s policy. He also maintains peaceful relations with Marine Le Pen."
- Earlier, Macron met with President of the National Assembly Yaël Braun-Pivet (who hails from Renaissance) and after lunch with Bayrou will talk to the President of the Senate Gerald Larcher from the conservative Les Republicains (LR).
- A Bayrou gov't could look to bring the centre-left Socialist Party (PS) in alongside the centrist Ensemble alliance and LR, with the perennial presidential candidate holding better relations with the centre-left than Barnier. However, it would require a breakdown of the left-wing New Popular Front (NFP) alliance that led the charge for the ouster of Barnier. PS First Sec Olivier Faure has said he is willing to talk compromises but it remains to be seen whether PS would back a Macron-supporting gov't.
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US 10YR FUTURE TECHS: (Z4) Bear Cycle Remains Intact
- RES 4: 112-22 High Oct 16 and a key short-term resistance
- RES 3: 112-14 50-day EMA
- RES 2: 112-07 High Oct 21
- RES 1: 110-30/111-15+ High Nov 1 / 20-day EMA
- PRICE: 110-10+ @ 11:31 GMT Nov 5
- SUP 1: 109-27+ Low Nov 1
- SUP 2: 109-15 Low Jul 1
- SUP 3: 109-05 76.4% retracement of the Apr - Sep bull cycle
- SUP 4: 108-21+ 2.0% 10-dma envelope
A bear cycle in Treasuries remains in play and last week’s extension lower, reinforces current bearish conditions. Note that moving average studies are in a bear-mode position too, highlighting a dominant downtrend. The 110-00 handle has been pierced. A continuation lower would open 109-15, the Jul 1 low. Initial firm resistance is seen at 111.15+, the 20-day EMA. Short-term gains would be considered corrective.
GERMAN AUCTION RESULTS: ESM ISSUANCE: 3-Month ESM-Bills
| Type | 3-month bills |
| Maturity | Feb 6, 2025 |
| Amount | E1.099bln |
| Target | E1.1bln |
| Previous | E1.087bln |
| Avg yield | 3.037% |
| Previous | 3.182% |
| Bid-to-cover | 3.79x |
| Previous | 2.26x |
| Previous date | Oct 01, 2024 |
OUTLOOK: Price Signal Summary - USDJPY Trend Needle Points North
- In FX, EURUSD traded higher Monday. However, recent gains continue to appear corrective. The trend condition is bearish and moving average studies remain in a bear-mode position, highlighting a dominant downtrend. Resistance to watch is 1.0880, the 20-day EMA. It has been pierced and a clear break of it would signal scope for a stronger recovery, towards the 50-day EMA at 1.0938. The bear trigger is unchanged at 1.0761, the Oct 23 low. First support is 1.0808, the Oct 30 low.
- The trend theme in GBPUSD remains bearish and short-term gains are considered corrective. Last Thursday’s sell-off reinforces the bear condition. The breach of 1.2908, the Oct 23 low, confirmed a resumption of the bear leg and exposed 1.2846, 76.4% of the Aug 8 - Sep 25 bull leg. It has been pierced, a clear break of it would strengthen a bearish theme and open 1.2799, the Aug 15 low. Initial firm resistance is 1.3046, the 50-day EMA.
- The USDJPY trend needle continues to point north. Recent gains have confirmed a resumption of the current uptrend. Price has pierced 153.40, the 61.8% retracement of the downleg posted off the July 3rd high. A clear breach of this level would set the scene for an extension towards 155.27, a 2.00 projection of the Sep 16 - 27 - 30 price swing. Initial firm support is 149.11, the 50-day EMA. The 20-day EMA is at 150.86.
