NETHERLANDS: No Final Results Yet, But Advantage To D66
The final results of the general election within the Netherlands will not be known until 31 October, after the municipality of Venray delayed its final verification procedure. The eventual vote tally could prove critical for the start of the process to find a new governing coalition. The far-right populist Party for Freedom (PVV) and liberal progressive Democrats 66 (D66) are within several thousand votes of one another in the race for first place in the national tally. The largest party in the House of Representatives is customarily given the first opportunity to sound out others on forming a coalition gov't.
- At present, D66 leads by 15,155 votes. The mayor of Veneray estimates that 24,000 individuals in his constituency cast a ballot. This is in addition to the 135,000 Dutch overseas who requested a ballot. Dutch voters abroad returned the lowest level of support for the PVV in the 2023 election. As such, it would appear that D66 are the strong favourite to emerge with the highest vote tally.
- PVV leader Geert Wilders has called for exploratory talks to be held back until all votes are counted. Speaker of the House Martin Bosma does not expect ballots from abroad (and therefore the final total) to be ready by next Tuesday (4 Nov), and is seen as keen to talk through the results with party leaders and assign initial exploratory committees.
- D66 emerging as the largest party could lead to a swifter coalition formation, given it has a clearer path to a majority gov't than the PVV, who other parties have said they will not work with.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
EURUSD TECHS: Monitoring Support
- RES 4: 1.2063 2.236 proj of the Feb 28 - Mar 18 - 247 price swing
- RES 3: 1.2000 Round number resistance
- RES 2: 1.1919/23 High Sep 17 / 2.0 proj of Feb 28 - Mar 18-27 swing
- RES 1: 1.1755/1820 High Sep 29 / 23
- PRICE: 1.1730 @ 16:26 BST Sep 29
- SUP 1: 1.1646 Low Sep 25
- SUP 2: 1.1574 Low Aug 27
- SUP 3: 1.1528 Low Aug 5
- SUP 4: 1.1392 Low Aug 1 and bear trigger.
The trend theme in EURUSD remains bullish and the recent pullback appears corrective. Attention is on support at 1.1682. the 50-day EMA. It has been pierced, a clear break of this average would signal scope for a deeper retracement and expose 1.1574 initially, the Aug 27 low. For bulls, a clear resumption of gains would refocus attention on 1.1923, a Fibonacci projection. Initial firm resistance to watch is 1.1820, the Sep 23 high.
FOREX: AUD and JPY Lead G10 Advance as Dollar Dips Further
- Bearish dollar momentum continues to be a function of concerns related to the potential US government shutdown, which President Trump has said will probably occur. Haven demand for the Japanese yen has prompted USDJPY to fall another 0.5%, while a moderate hawkish tilt to the September RBA meeting promotes AUD to the top of the G10 leaderboard.
- USDJPY traded to a low of 147.66, with spot narrowing the gap to initial support which lies at 147.59, the 50-day EMA. Stronger pivot support has been defined at 145.49, the Sep 17 and post-Fed low.
- The broad dollar weakness has boosted AUDUSD back above the 0.66 handle on Tuesday. RBA Governor Michele Bullock declined to say whether the central bank retains an easing bias after the Board held the cash rate at 3.6%, stressing that future moves will depend on incoming data, with the current level still viewed as slightly restrictive.
- Overall, the AUDUSD uptrend remains intact and recent weakness appears to have been a correction. Initial firm resistance to watch at 0.6628 has been met today and will be closely monitored ahead of the APAC crossover. A stronger reversal higher would refocus attention on 0.6707, the Sep 17 and post-Fed high.
- Price action prompted another impressive surge for AUDNZD, rising to a fresh cycle high above 1.14, continuing to narrow the gap with the 2022 highs located at 1.1491.
- US data did little to spur volatility in currency markets. Job openings were relatively steady in August in the latest JOLTS report, but secondary metrics suggested further loosening in labor market conditions. Consumer confidence was weaker-than-expected.
- On Wednesday, the first focus will be on Japan’s Q3 Tankan Survey. Eurozone inflation data, US ADP employment and the ISM manufacturing PMI release are all scheduled.
OPTIONS: Busy Session For Euribor Call Buying, Larger Bund Put Purchase
Tuesday's Europe rates/bond options flow included:
- RXX5 125p, bought for 2 in 10k
- ERH6 98.0625/98.1875cs vs 97.875p, bought the cs for 1.25 in 7k total
- ERH6 98.25/98.12/98.06/97.81p condor, bought for 0.75 in 2k
- ERH6 98.00/98.06/98.12/98.18c condor, bought for 0.25 for 4k
- ERM6 98.37c, bought for 3.25 in 12k
- 0RX5 98.06c vs 0RV5 98.00c, bought the Nov for 1 and 1.25 in 10k Total.
- SFIZ5 95.95/96.25^^, bought for 2 in 2k
- SFIF6 96.25/96.15ps 1x2, bought for 1.5 in 1k.
- SFIZ6 96.25/96.75/97.00cfly vs SFIM6 96.00p x2, traded 7.75 for the fly in 2.5k
