OIL: OPEC+ Discussing 411kbd August Hike: Bloomberg

• RES 4: 1.1625 1.500 proj of the Feb 28 - Mar 18 - Mar 27 price swing
• RES 3: 1.1608 High Nov 9 2021
• RES 2: 1.1573 High Apr 21 and the bull trigger
• RES 1: 1.1455 High Jun 03
• PRICE: 1.1381 @ 16:14 BST Jun 3
• SUP 1: 1.1307 20-day EMA
• SUP 2: 1.1182/1.1065 50-day EMA and a pivot level / Low May 12
• SUP 3: 1.1026 38.2% retracement of the Feb 3 - Apr 21 bull cycle
• SUP 4: 1.0943 Low Apr 10

A bullish theme in EURUSD remains intact and Monday’s gains and fresh short-term cycle high reinforce current conditions. The breach of  1.1419, the May 26 high, confirms a resumption of the trend and opens 1.1573, the Apr 21 high and bull trigger. Support to watch lies at 1.1182, the 50-day EMA. A clear break of this average would undermine the bull theme and signal scope for a deeper retracement. This would open 1.1065, the May 12 low.   

• The Italian finance ministry reports a preliminary central government budget deficit of E11.4bn in May for an improvement from the E13bn in May 2024 and E16.2bn in May 2023.
• The cumulative deficit of E80.4bn over the five first months of the year tracks a little inside the E82bn seen in the first five months of both of 2024 and 2023.
• That improvement looks a little better still in % GDP terms considering nominal GDP growth of 2.1% Y/Y in 1Q25.
• Italy displayed impressive fiscal consolidation through last year, with a deficit of 3.4% GDP vs the 3.8% GDP government forecast, supporting more positive ratings action.
• The European Commission projects the Italian deficit at 3.3% in 2025 and 2.9% in 2026 to just about return to sub-3% GDP deficits per Maastricht rules, while it sees Italian growth below 1% through 2026.

Tuesday's Europe rates/bonds options flow included:

• ERM5 97.875/98.00/98.125/98.25 call condor, sold out at 11 in 10k
• SFIQ5 95.95/95.90/95.80p ladder, bought for 1.25 in 5k
• SFIU5 95.85/95.75/95.65p fly, bought for 1.25 in 2k
• SFIZ5 96.30/96.50 call spread vs 2NZ5 96.60/96.80 call spread, paper pays 1.75 for 4k