EM CEEMEA CREDIT: Romania: S&P affirming rating with neg outlook

• RES 4: 171.09 High Jul 23 ‘24 
• RES 3: 170.47 76.4% Fibonacci retracement for Jul - Aug ‘24 downleg  
• RES 2: 169.91 1.236 proj of the Feb 28 - Mar 18 - Apr 7 price swing
• RES 1: 169.71 High Jun 23
• PRICE: 168.53 @ 07:51 BST Jun 24 
• SUP 1: 167.46 Low Jun 23 
• SUP 2: 165.90 20-day EMA 
• SUP 3: 164.95 Low Jun 13   
• SUP 4: 164.24 50-day EMA   

The trend set-up in EURJPY remains bullish and Monday’s strong start to this week’s session, reinforces a bullish theme. The cross has recently cleared 166.69, the Oct 31 ‘24 high. This signals scope for an extension towards 170.47, a key Fibonacci retracement point. Note that the cross is overbought, a pullback would unwind this condition. Support to watch lies at 165.90, the 20-day EMA.

Bloomberg reporting: "*GERMANY REACHES DEAL WITH STATES ON SHARING BURDEN FROM TAX CUT"

From the story: "The working group of the federal and state governments sealed a deal late Monday that will see Berlin taking over the costs for municipalities until 2029, using revenue from the sales tax, according to officials familiar with the talks."

• Follows previous reports flagging such a compromise as likely.

Lower oil prices following the announcement of the Israel-Iran ceasefire and lack of a meaningful Iranian reaction to the U.S. bombing of its nuclear facilities result in a modest dovish move for GBP STIRs.

• Some counter comes from broader risk-on price action that accompanies the news.
• BoE-dated OIS contracts covering meetings through ’25 are little changed to 1.5bp more dovish, showing 19bp of easing for August, 25.5bp through September, 41bp through November and ~50bp through year-end. Recent dovish extremes of ~55bp of cuts through year-end remain unchallenged.
• SONIA futures are flat to +2.5.
• A raft of BoE speak is due today with Bailey (x2), Pill, Ramsden, Greene & Breeden all set to speak. Note that Breeden will speak at the UK Finance Digital Innovation Summit, so may not comment on monetary policy. Meanwhile one of Bailey’s appearances, as well as Pill’s appearance, will take place at a conference that looks back to the gold standard era, so may not reveal much new.
• Elsewhere, lower tier CBI trends data will cross this morning.