CEE: ROMANIA: PSD Pulls Out Of Coalition Talks, May Back Centre-Right Gov't
Romania's outgoing Prime Minister Marcel Ciolacu declares that his Social Democratic Party (PSD) has withdrawn from coalition talks but stands ready to back a pro-EU coalition in parliament.
- Ciolacu wrote that his party understood the outcome of the recent parliamentary election as a vote of no confidence in the political class focused on futile disputes and hence was looking to move forward and contribute to the formation of a stable government composed of all pro-EU political parties.
- Ciolacu: "Unfortunately, you cannot build anything sustainable with partners who are incapable of overcoming their own egos and ideological cliches and who behave the same way as in the election campaign that brought us here (...) who are disgusted by siting at the table with you."
- Ciolacu said that the PSD is "not running away from responsibility" and will "vote for a right-wing government in parliament," referring to other pro-EU parties involved in coalition talks which could still form a minority government. The exact status of the PSD in the new parliament and its relationship with the potential government is yet to be determined.
- Pro-EU parties were expected to finalise the distribution of ministerial portfolios today and submit the proposed cabinet line-up, with a prime ministerial candidate from the PSD, to the President before seeking a vote of confidence in the legislature.
- The PSD was the front-runner in the recent parliamentary election but losses for pro-EU parties forced them to seek a wider coalition amid an increase in support for far-right parties (AUR, SOS and POT).
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COMMODITIES: Long-Term Trend Condition in Gold Unchanged and Bullish
A bearish theme in WTI futures remains intact and the move lower from the Nov 7 high has reinforced current conditions. Attention is on $65.74, the Oct 1 low, and $63.90, the Sep 10 low and key support. For bulls, a clear reversal to the upside would instead refocus attention on the key short-term resistance at $77.04, the Oct 8 high. Clearance of this level would resume the recent uptrend. Initial firm resistance is $72.41, the Nov 7 high. The long-term trend condition in Gold is unchanged, it remains bullish and the latest move down is considered corrective. The bear phase has resulted in a breach of the 20- and 50-day EMAs, and the metal is trading closer to its recent lows. The breach of the EMAs signals scope for a deeper retracement and sights are on $2511.1 next, the Sep 18 low. Firm resistance is seen at $2653.3, the 20-day EMA.
- WTI Crude down $0.35 or -0.51% at $68.8
- Natural Gas down $0 or -0.1% at $2.972
- Gold spot up $18.4 or +0.7% at $2631.84
- Copper down $0.9 or -0.22% at $416.55
- Silver up $0.22 or +0.69% at $31.4048
- Platinum down $3.94 or -0.41% at $964.07
EQUITIES: Eurostoxx 50 Futures Reapproach Recent Lows, Bearish Theme Intact
Despite recent gains, a bearish condition in Eurostoxx 50 futures remains intact. The move lower last week marked a resumption of the downtrend that started Sep 30. Price has breached 4746.94, 61.8% of the Aug 5 - Sep 30 bull cycle. This exposes 4662.12, the 76.4% retracement point. Initial firm resistance has been defined at 4961.00, Nov 6 high, where a break would highlight a reversal. First resistance is at 4857.19, the 20-day EMA. The latest move lower in the S&P E-Minis contract appears corrective. Medium-term trend signals such as moving average studies, continue to highlight a dominant uptrend. The contract has traded through the 20-day EMA. The next key support to monitor is 5830.35, the 50-day EMA. A clear break of this level would signal scope for a deeper retracement. A resumption of gains would refocus attention on the bull trigger at 6053.25, Nov 11 high.
- Japan's NIKKEI closed higher by 193.58 pts or +0.51% at 38414.43 and the TOPIX ended 18.27 pts higher or +0.68% at 2710.03.
- Elsewhere, in China the SHANGHAI closed higher by 22.161 pts or +0.67% at 3346.01 and the HANG SENG ended 87.06 pts higher or +0.44% at 19663.67.
- Across Europe, Germany's DAX trades lower by 226.8 pts or -1.18% at 18961.25, FTSE 100 lower by 31.86 pts or -0.39% at 8077.41, CAC 40 down 92.51 pts or -1.27% at 7184.13 and Euro Stoxx 50 down 63.31 pts or -1.32% at 4725.55.
- Dow Jones mini down 241 pts or -0.55% at 43300, S&P 500 mini down 28.25 pts or -0.48% at 5891.75, NASDAQ mini down 94 pts or -0.46% at 20541.75.
BONDS: Paring gains in Europe
Some likely profit taking/squarring ahead of the next area of interest in Bund seen at 133.02, sees the contract paring 20 ticks gains, Bund and the German strip is sold in decent size, with volumes at twice what you would expect for this time of the day.
Since Bund has cleared the 2.30% November low, after picking up some momentum on FTQ, giving the Geopolitical risks, in terms of the 10yr Yield, reference 132.76:
- 2.24% = 133.25.
- 2.20% = 133.66.
For the US 10yr, the 4.30% level would equate to 110.11+.
