CZECHIA: Pres Pavel Says Future Ministers Should Support NATO, EU Membership
May-28 07:25
- President Petr Pavel told Hospodářské noviny that he received a mandate from a majority of voters to pursue pro-NATO and pro-EU policies, and expects future miniters to align with this stance. Some interpreted this as a signal to ANO not to give up key ministerial positions to potential Eurosceptic coalition partners, should it win the upcoming election. ANO deputy leader Karel Havlíček told Seznam Zprávy that his party will only approve ministers who clearly support continued membership in the NATO and the EU and 'any discussion about leaving [these organisations] is not an issue for us.'
- Prime Minister Petr Fiala admitted that the contract for the procurement of new nuclear reactors at the Dukovany power plant may not be signed before this autumn's parliamentary election as legal challenges delayed the completion of the process. The Czech Radio noted that the CZK407bn deal is the largest public contract in Czechia's history.
- The Czech National Bank (CNB) released a paper on the upgraded version of its g3+ forecasting model, which became operational in April 2024. Note that the CNB is looking to develop a new forecasting model after coming to a conclusion that it remains one of very few central banks still relying solely on a dynamic stochastic general equilibrium (DSGE) model.
- The Finance Ministry will offer CZK5.0bn of 3.30% 2033 bonds, CZK4.0bn of 3.50% 2035 bonds and CZK1.0bn of 1.95% 2037 bonds at an auction today.
- The cabinet holds a meeting today, with a briefing expected at 15:00BST/16:00CEST.
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GILTS: Resistance In Futures Holds
Apr-28 07:19
While gilts initially trade lower, buyers quickly emerge, leaving the space little changed vs. late Friday levels.
- Broader core global FI markets trade weaker after U.S. Treasury Secretary Bessent pointed to trade talks moving in the right direction, particularly with Asia.
- Impending supply in Europe also weighs on EGBs.
- Futures as low as 93.16 before a bounce to 93.33. Contract last ~93.25.
- The recent bullish technical theme remains intact. Initial resistance located at Friday’s high (93.34), follow by a Fibonacci retracement level at 93.44.
- Initial support still located at the 20-day EMA (92.22 today).
- Yields little changed to 1bp lower, modest flattening bias to start the week.
- Initial support in 10s (4.460%) remains untested.
- GBP STIRs still trading around levels we flagged ahead of the gilt open, with just under 90bp of BoE cuts priced in through year-end.
- Final manufacturing PMI data (Thursday) headlines a limited domestic data calendar this week. BoEspeak from Ramsden (Tuesday) & Lombardelli (Wednesday) will also be eyed.
- On the supply front, the DMO will come to market with 30-Year (Tuesday) & 3-Year (Wednesday) paper this week.
SILVER TECHS: Holding On To The Bulk Of Its Recent Gains
Apr-28 07:15
- RES 4: $36.000 - Round number resistance
- RES 3: $34.903 - High Oct 23 ‘24 and the bull trigger
- RES 2: $34.590 - High Mar 28
- RES 1: $33.686 - High APr 25
- PRICE: $32.916 @ 08:14 BST Apr 28
- SUP 1: $32.087 - Low Apr 17
- SUP 2: $30.577/28.351 - Low Apr 10 / 7 and the bear trigger
- SUP 3: $27.686 - Low Sep 6 ‘24
- SUP 4: $27.180 - Low Aug 14 ‘24
A strong rally in Silver last Wednesday reinforces the current bullish theme and the metal is holding on to the bulk of its latest gains. Price has cleared $33.117, 76.4% of the Mar 28 - Apr 7 bear leg. This paves the way for a climb towards $34.590, the Mar 28 high. On the downside, initial firm support to watch has been defined at $32.087, the Apr 17 low. A break of this level would undermine the bull cycle and highlight a potential reversal.
NORWAY: Bankruptcies Spike As High Rates Weigh; Focus On May 8 NB Guidance
Apr-28 07:08
Norwegian bankruptcies rose 22.5% Y/Y in the four quarters to Q1 2025, a sign that high interest rates are weighing on mainland activity and employment. Markets price almost 20bps of easing through the June decision, placing focus on whether any guidance for a cut will be provided on May 8.
- A reminder that in her April 8 speech, Governor Wolden-Bache noted that “considerable weight shall be given to employment – also at times when inflation deviates significantly from the target”.
- Against this backdrop, hard labour market data has shown some signs of softening but continues to hold up reasonably well overall. The LFS trend unemployment rate was 4.1% in March, steady against February’s 2-tenth upwardly revised reading.
- Employment growth was -0.8% M/M (vs -0.1% prior), corresponding to a 3m/3m rate of 0.1% (vs -0.4% prior). The Q1 Regional Network Survey indicated Q1 employment growth at 0.2%.
