OUTLOOK: Price Signal Summary - Bear Threat In WTI Remains Present

• RES 4: 112-23+ 1.618 proj of the Jan 13 - Feb 7 - Feb 12 price swing
• RES 3: 112-13   1.500 proj of the Jan 13 - Feb 7 - Feb 12 price swing
• RES 2: 112-01   High Mar 4 and a bull trigger    
• RES 1: 111-22+ Intraday high   
• PRICE:‌‌ 111-19 @ 11:26 BST Mar 31 
• SUP 1: 110-21+ 20-day EMA 
• SUP 2: 110-08/06 50-day EMA / Low Mar 27 
• SUP 3: 110-00   High Feb 7 and a key support 
• SUP 4: 109-18+ Trendline support drawn from the Jan 13 low      

Treasury futures are trading higher today, as the contract starts the week on a bullish note. This marks an extension of the recovery from last week’s low of 110-06+ (Mar 27). Attention is on key resistance at 112-01, the Mar 4 high. A break of this level would confirm a resumption of the uptrend that started Jan 13, and open 112-13, a Fibonacci projection. Initial support to watch is 110-21+, the 20-day EMA.

OI data suggests that net long setting outweighed instances of net short cover during Friday’s SOFR futures rally, with the most concentrated round of net long setting coming in SFRM5 through SFRZ5.

Looking a bit closer at the state-level German CPI March data released this morning, core and services inflation appear to have slowed, while for goods the data points towards broadly a stable Y/Y rate, if not a slight uptick. Overall, analysts' expectations ahead of the release appear to have broadly materialized in March; these were for deceleration in the (key) services category (on the back of both lower momentum as well as base effects) .

• Looking at the categories with heavy services weighting, we see decelerations in education (4.7% Y/Y from 5.0% February), restaurants and hotels (3.9% from 4.2%), and recreation and culture (1.0% from 1.1%). For communication as well as healthcare, meanwhile, we see some slight acceleration vs last month (-1.1% from -1.2%, and 3.0% from 2.8%, respectively).
• The mixed-weighting (across services and goods) transport category meanwhile saw the most pronounced deceleration in its Y/Y rate - to around 0.9% to 1.0% from 2.4% in February. This is as energy (broadly -3.0% to -2.5%, based on only ~50% of basket weighting data, from -1.6% Feb) and travel services likely acted in tandem here - ahead of the release, the so-called Easter effect was expected to materially drag airline price growth down in comparison to last month.
• Food inflation (incl. non-alcoholic beverages) meanwhile seems to have accelerated notably - to 3.4 to 3.5% Y/Y from February's 2.8%.
• Categories associated with the core goods sector appear also firmer than before - we see clothing and footwear around 1.2-1.3% Y/Y (0.5% Feb) and Furnishings and Household Equipment around -0.24% Y/Y (-0.7% Feb).