EU HEALTHCARE: Philips (PHIANA: Baa1/BBB+/BBB+) Guidance

• In the FI space, Bund futures are trading closer to their recent highs. A bull cycle remains in play and the latest pullback is considered corrective. A fresh short-term cycle high on Apr 7 reinforces a bullish theme. The contract has recently cleared 131.14, 76.4% of the Feb 28 - Mar 11 bear leg. This opens 132.56 next, the Feb 28 high. Initial firm support lies at 128.60, the Apr 9 low. A break below this level would alter the picture. Initial firm support lies at 128.60, the Apr 9 low.
• A sharp sell-off in Gilt futures last week highlights a strong bearish theme. The contract has breached 90.55, the Mar 27 low. Clearance of this level confirms a full reversal of the Mar 27 - Apr 7 rally. Sights are on the 90.00 handle next, briefly pierced on Apr 9. A clear break of this level would signal scope for an extension towards a key support at 88.96, the Jan 13 low on the continuation chart. Initial resistance is at 91.81, the 20-day EMA.

• Standing out amid the lower US yields this week is the resilience of the Swiss Franc, which remains in close proximity to recent cycle highs. For USDCHF, the pair broke an important support at 0.8333 last week and subsequent weakness saw the pair plumb fresh ten-year lows.
• Last week’s 0.8099 low print matched perfectly with touted support, the 76.4% retracement of the Jan 15 '15 - Dec 15 '16 recovery. This remains the key short-term support and below here, the market’s attention will be on a move towards 0.8028, another projection point.
• Additionally, EURCHF is trading within 30 pips of the major double bottom support around 0.9210. A break of which would target 0.9109, the 0.764 projection of the May 27 '24 - Nov 22 '24 - Mar 14 price swing, levels sure to have the attention of the SNB.
• Import/Export data is due Thursday, in an otherwise limited domestic calendar this week.

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