OUTLOOK: Price Signal Summary - EURUSD Tests Support At The 50-Day EMA

• US rates are off their most hawkish levels seen overnight but hold losses seen after weekend comments from US President Trump that the US will blockade Iran after talks failed.
• Fed Funds implied rates are 1bp higher from Friday’s close for the Jun meeting, 2.5bp for Dec and 3.5bp for Jun 2027.
• FF cumulative moves from 3.64% effective: +1bp Apr, +1bp Jun, 0bp Jul, -0.5bp Sep, -0.5bp Oct and -4bp Dec before building to -10bp in Jun 2027.
• SOFR futures are currently up to 3 ticks lower in H7 and M7 contracts as front reds remain most sensitive to Iran-related developments (with the H7 4.5 ticks off earlier lows of 96.325).
• The SOFR terminal implied yield of 3.44% (H8, +2bp) compares with 3.455% with the settle on Apr 7 before Trump’s then announcement of a two-week ceasefire (having rallied into it) and 3.40% on Apr 8.
• It’s a light day for data (existing home sales) and Fedspeak (Miran late on) before both pick up tomorrow with the March PPI report and multiple speakers. 

"The REPUBLIC OF FRANCE has mandated BARCLAYS, BNP PARIBAS, BofA SECURITIES, CREDIT AGRICOLE CIB, DEUTSCHE BANK and MORGAN STANLEY to act as Joint Lead Managers on an upcoming new Green OAT, due 25 June 2037. The transaction will be launched by syndication in the near future, subject to market conditions." From market source

• Note that France's green issuance cap for 2026 is set at E23bln.
• Green syndications in the past have ranged from E5-8bln in size. This is the shortest maturity green OAT to be launched and we therefore look for a transaction of E7-10bln. We expect the transaction to take place tomorrow.

• In the equity space, a strong rally in S&P E-Minis last week highlights an extension of the reversal that started Mar 31. Note that trend signals remain bearish and for now, this suggests gains are corrective. A continuation higher would open 6921.09 next, the 76.4% retracement of the Jan 28 - Mar 31 bear leg. Key medium-term resistance and the bull trigger is far off at 7096.50, the Jan 28 high. Initial firm support to watch lies at 6567.00, the Apr 6 low. First support lies at 6701.96, the 50-day EMA.
• EUROSTOXX 50 futures are holding on to the bulk of their recent gains. The contract has traded through both the 20- and 50-day EMAs, paving the way for a climb towards 5945.47, the 76.4% retracement of the Feb 26 - Mar 23 bear leg. First key support to watch lies at 5525.00, the Apr 2 low. A move lower and a breach of this support would highlight a reversal. Initial support lies at 5730.73, the 50-day EMA.