OUTLOOK: Price Signal Summary - EUROSTOXX50 Futures Bull Cycle Still In Play

DUK6 105.50/105.20ps, bought for 5.75 in 5k vs 105.73.

• After a 5% pullback in March, AUDUSD has recovered around 1.6% of this move and trades back towards 0.6950 on Tuesday, leaving the pair in consolidation mode. The bounce for NZDUSD has been less notable, with the pair remaining over 6% off the 2026 highs, and still close to the 0.5700 level as markets await Wednesday’s RBNZ decision.
• This has translated into a steady ascent for AUDNZD in early April, with the cross matching the recent cycle highs at 1.2149 in recent trade, a break of which would place the cross at the highest level since 2013. Above here, resistance appears scant until 1.2344, the 61.8% retracement of the 2011-2020 range.
• RBNZ Governor Breman is likely to reiterate this month that given monetary policy lags, it is better for fiscal policy to respond to a supply shock, which it has with some fuel price relief. Our preview is here: https://mni.marketnews.com/4vuZT2y
• The committee could be in the difficult position where the growth outlook softens but price pressures and expectations are rising. Therefore, decisions are likely to be even more meeting-by-meeting and data dependent than usual with Q1 CPI released 21 April, Q2 inflation expectations 13 May, Q1 jobs/wages 6 May and Q1 real retail sales 22 May.

Spain's March services PMI increased further into expansion at 53.3 (50.6 cons, 51.9 Feb), showing resilience in the wake of the Middle East conflict. Meanwhile, Italy's services PMI fell into contraction at 48.8 (50.9 cons, 52.3 Feb), likely helped lower by the end of the Winter Olympics. In both releases it was reported that confidence has weakened and input prices have risen notably, though Italian firms are reported to be soaking up a larger proportion of cost increases.

• On prices, the press releases note the Middle East conflict raised input prices but output prices diverged, rising more in Spain: "a noticeable acceleration in input price inflation, which hit its highest level for nearly three years. Output charges were increased in response to the greatest degree since August 2025." Whereas in contrast in Italy: "Prices data pointed towards an intensification of costs, most of which was absorbed by firms, as charge inflation picked up but to a much smaller extent."
• Spain saw sustained service sector growth in March: "Service providers continued to report higher volumes of incoming new business, although growth overall was the weakest for nine months ... [Middle East conflict] was reported to have led to a noticeable degree of market uncertainty and hesitancy amongst clients, especially those based outside of Spain. New export business declined in March for a third month running and at the quickest rate since January 2024... confidence regarding future activity sinking to its lowest since September 2023. Service providers are especially concerned about inflation and its adverse impact on spending."
• Italy's services PMI fell into contraction for the first time since late 2023: "demand contracted in both domestic and external markets ...  The growth trend seen in employment which spanned over a year broadly stalled, and confidence deteriorated." Some pullback in activity following the Winter Olympics throughout Feb was also highlighted by panellists.
• The Eurozone final services PMI (also released this morning) came in at a ten-month low 50.2 (50.1 flash, 51.9 Feb), but still expansionary. On prices, the press release notes: "Cost pressures intensified in March, with inflation accelerating to a 34-month high... Prices charged increased, although the extent of the latest rise was fractionally slower than that seen in February."