UK: PM To Meet NATO's Rutte 9 June To Discuss Def Spending

Jun-05 11:04

Downing St. spox has confirmed that PM Sir Keir Starmer will meet with NATO Secretary General Mark Rutte on Monday, 9 June, to discuss how members of the alliance can boost defence spending. The UK sits in something of a difficult position at present with regard to its military expenditure. 

  • While one of the largest overall spenders in the alliance, and a nuclear power, the gov't has only spoken so far of its "ambition" of hitting 3% of GDP being spent on defence by 2034 (end of the next parliament).
  • Indeed, the Strategic Defence Review announced earlier in the week was swiftly overwhelmed by headlines saying that the UK would be "forced" to raise this to 3.5% in order to keep the US on side.
  • With Chancellor of the Exchequer Rachel Reeves to announce the conclusions of the spending review on 11 June (setting departmental spending for the coming years), there could be implications for other areas of gov't spending should the gov't be forced into greater investment in defence sooner rather than later.
  • This 3.5% figure feeds into the '3.5%+1.5%' target that is now likely to be agreed to by national leaders at the 24-25 June NATO summit (see 'NATO: US' Hegseth Signals Backing Of Mooted 3.5%+1.5% Of GDP Def Spend Split', 11:37BST). 

 

Historical bullets

SONIA: Some Condor sellers

May-06 11:02
  • SFIK5 95.80/95.90/96.00/96.10c condor sold at 6 in 5k.
  • SFIM5 96.00/96.15/96.30/96.45c condor, sold at 3.75 in 7.5k

OUTLOOK: Price Signal Summary - WTI Gains Considered Corrective

May-06 11:01
  • On the commodity front, Gold has recovered from its recent lows and this suggests the correction between Apr 22 - May 1, is over. A continuation higher would refocus attention on key resistance and the bull trigger at $3500.1, the Apr 22 high. Clearance of this level would confirm a resumption of the primary uptrend. Key short-term support has been defined at $3202.0, the May 1 low. A break of this level is required to signal scope for a deeper retracement. First support to watch is $3252.1, the 20-day EMA.
  • In the oil space, a medium-term bearish trend in WTI futures remains intact and short-term gains are considered corrective. The move down that started Apr 23 signals the end of the correction between Apr 9 - 23. That cycle higher allowed an oversold condition to unwind. Attention is on $54.67, the Apr 9 low and a bear trigger. Clearance of this level would resume the downtrend and open $53.72, a 2.236 projection of the Feb 20 - Mar 5 - Apr 2 price swing. Resistance to watch is $64.32, the 50-day EMA.

OUTLOOK: Price Signal Summary - USDJPY Trend Needle Points South

May-06 10:50
  • In FX, recent weakness in EURUSD appears corrective. The trend structure remains bullish - moving average studies are in a bull-mode position signalling a dominant uptrend. The latest move down has also allowed an overbought condition to unwind. A resumption of gains would open 1.1608, the Nov 9 2021 high. Initial key support to watch is the 20-day EMA, at 1.1269. A break of this average would signal scope for a deeper pullback.
  • The latest pullback in GBPUSD appears corrective. A tweezer top formation on the daily candle chart last Monday/Tuesday, highlights a short-term top. Firm support at 1.3232, the 20-day EMA, remains intact. A break of this level would signal scope for a deeper retracement. Note that moving average studies are in a bull-mode position, signalling a dominant underlying uptrend. A resumption of gains would open 1.3510, a 1.236 projection of the Feb 28 - Apr 3 - 7 price swing.
  • The trend direction in USDJPY remains bearish and gains since Apr 22 are considered corrective. Price remains below resistance at the 50-day EMA, at 146.49. A clear break of this average would highlight a possible reversal. Moving average studies remain in a bear-mode position highlighting a dominant downtrend. A resumption of the trend would open 139.79 next, a 1.382 projection of the Feb 12 - Mar 11 - 28 price swing. First key support to watch is 141.97, the Apr 29 low.