EM CEEMEA CREDIT: ROMANI: PMI: small improvement, but weak number

Continued block flow in the SFRM5 96.125/50 call spread, with another 7.5K blocked at 3.75, CME indicates buyer initiated. 12.5K of the call spread now bought across 4 blocks in early London dealing.

• RES 4: $76.57 - High Jan 15 and the bull trigger   
• RES 3: $74.66 - High Jan 22 
• RES 2: $72.91 - High Feb 11 and key resistance 
• RES 1: $72.10 - High Apr 1   
• PRICE: $71.10 @ 07:15 BST Apr 2 
• SUP 1: $69.01 - 20-day EMA   
• SUP 2: $66.09/64.85 - Low Mar 19 / 5 and the bear trigger
• SUP 3: $63.73 - Low Sep 10 ‘24 and a key medium-term support
• SUP 4: $60.98 - 1.764 proj of the Jan 15 - Feb 4 - 11 price swing   

WTI futures traded sharply higher Monday. This undermines the medium-term bearish condition and instead signals scope for a continuation higher near-term. The rally has exposed the next key resistance at $72.91, the Feb 11 high. Clearance of this level would strengthen the bullish theme.  On the downside, initial firm support to watch lies at $69.01, the 20-day EMA. A breach of this level would signal a potential reversal.

Goldman Sachs note that their “economists' revised tariff baseline complicates the outlook for rates given the opposing impulses on growth and inflation.”

• They “expect weaker growth outcomes to outweigh inflation concerns for the ECB, taking front-end yields lower and curves steeper. But eventual fiscal loosening should keep Bund yields near current levels. Ultimately, they revise their end-2025 10-Year Bund forecast to 2.80% from 3.00%”.