CEE: ROMANIA-Business Chambers Sound Warning Over 'Erosion Of Credibility'
May-14 11:03
Several chambers of commerce from major investors in Romania, including the US, UK, and Germany, have issued a joint call highlighting concerns in the business community "over the accelerating deterioration of the business climate and the erosion of Romania’s credibility." The call comes just days ahead of the second round of the presidential election on 18 May, in which right-wing nationalist candidate George Simion is seen as the frontrunner against pro-EU moderate Nicosur Dan.
- The statement says "Economic growth relies on trust and predictability". It adds that "To keep Romania firmly anchored in its Euro-Atlantic path, to seize strategic opportunities, and to maintain its position on the investment map, political decisions must reflect stability and coherence."
- In order for a return of business confidence, the private sector "needs action and responsibility from all political actors, ensuring a predictable economic environment, safeguarding the free market, the rule of law, and national security, while upholding Romania’s European orientation and commitments to international structures."
- There are also concerns at EU and NATO headquarters in Brussels that a win for Simion could see Romania veer away from its pro-Western orientation and towards a more friendly stance with Russia in the context of Ukraine and with China in the context of trade and investment.
- Opinion polling initially showed Simion retaining a narrow lead, having won 41% of the vote to Dan's 21% in the first round on 4 May. However, these have narrowed somewhat as the run-off approaches. Political betting markets show Simion as the favourite, with a 63% implied probability of winning to Dan's 38% according to Polymarket.
Chart 1. Presidential Election Second Round Opinion Polling, %
Source: Verifield, INSCOP, CURS, Sociopol, AtlasIntel, MNI
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OUTLOOK: CEEMEA FX Price Signal Summary - USDZAR Approaches Key Support
Apr-14 11:02
- USDZAR is trading lower, as it extends the reversal from last week’s 19.9328 high (Apr 9). For now, a move down appears corrective and the support levels to watch are; 18.8496, the 20-day EMA, and 18.6089, the 50-day EMA. A break below the 50-day EMA would undermine the bull theme. A reversal higher would refocus attention on 19.9328 where a break would resume the uptrend.
- The path of least resistance in USDTRY is unchanged and remains up. It is difficult to determine upside price projections given the nature of the long-term trend, however, a retest of the 40.00 handle and the Mar 19 high just above 41.00, is likely near-term. A reliable trend support lies at 37.6973, the 20-day EMA.
STIR: Fed Rates Sticky For Upcoming Meetings, Dovish Shift Beyond
Apr-14 10:49
- Fed Funds implied rates are little changed for meetings out to July but after that increasingly lower on the day with latest announcements of tariff exemptions for electronic items potentially short-lived.
- The Dec’25 implied rate is 6bp lower from Friday’s close.
- Further out the curve, the SOFR terminal implied yield is 8bp lower at 3.32%, pulling back having fully retraced a large drop seen after “Liberation Day” tariffs.
- Cumulative cuts from 4.33% effective: 6.5bp May, 22.5bp Jun, 41bp Jul and 84bp Dec.
- NY Fed consumer inflation expectations will again be of more note than normal after the continued ramping higher in the U.Mich equivalent.
- Focus is also likely on Fed Gov. Waller (permanent voter) speaking on the economic outlook at 1300ET (text and Q&A). It’s his first comments since last week's "pause" and various Treasury / swap market dislocations.
- He talked on balance sheet matters back on Mar 21 to explain his dissent at the Mar 18-19 meeting (balance sheet caution has gone too far, with no evidence reserves nearing an ample level). He had earlier in March said there was nothing wrong with the forecast of two rate cuts this year in a rowing back of particularly dovish comments from January when he noted potential for three or four cuts this year.
OUTLOOK: Price Signal Summary - Gold Bulls Remain In The Driver's Seat
Apr-14 10:33
- On the commodity front, the trend condition in Gold remains bullish and last week’s rally confirms and reinforces this condition. The yellow metal has traded through $3167.8, the Apr 3 high, to resume the primary uptrend and trade to fresh all-time highs. Moving average studies are unchanged, they remain in a bull-mode position highlighting a dominant uptrend. Initial firm support lies at 3063.4, the 20-day EMA. Sights are on 3291.8, a 1.00 projection of the Feb 28 - Apr 3 - Apr 7 price swing.
- In the oil space, a bearish theme in WTI futures remains intact and last Wednesday's rally is - for now - considered corrective. The move higher is allowing an oversold trend condition to unwind. Recent weakness has resulted in the breach of a number of important support levels, reinforcing a bearish threat. A resumption of the bear cycle would open $54.26, a 2.236 projection of the Feb 11 - Mar 5 - Apr 2 price swing. Initial firm resistance is seen at $64.85, the Mar 5 low and a recent breakout level.
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