NATO: Rutte-Germany Takes Lead On Def Spend; Rubio Calls For 5% Of GDP Agreement
Speaking in a presser at an informal meeting of NATO foreign ministers, Secretary General Mark Rutte says Germany "is really taking the lead in hiking defence spending", adds that he is "very happy about this given that it is the biggest economy in Europe." As noted earlier this morning, German Foreign Minister Johann Wadephul has indicated that he backs the 5% of GDP on defence target talked about by the US, albeit with speculation that the details of this could result in much less than 5% of GDP equivalent going on conventional defence (see 'GERMANY: German foreign minister supports 5% of GDP military spending', 0842BST and 'GERMANY: Additional 1.5pp Spending Potentially Not Military By Conventional Def', 0940BST).
- Earlier, US Secretary of State Marco Rubio reiterated US demands for a major increase in military spending across the alliance, posting on X: "The time is now. Allies need to give more to make NATO stronger. In my meeting with [Rutte], we charted a new course for increased defense spending and production. To better protect our Alliance: Defense production must rise, military readiness must improve, and burden sharing must be real. Looking forward to determining NATO’s path to 5% at the Hague Summit in June."
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OUTLOOK: Price Signal Summary - Resistance In WTI Remains Intact
- On the commodity front, the trend condition in Gold remains bullish and price is trading at its recent highs. The yellow metal last week 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 3077.5, 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 the rally last Wednesday 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.
EUR: FX Exchange traded Option
FX Exchange traded Options, cover the next 3 ECB meeting (April, June, July).
- EURUSD (8th Aug) 1.1800/1.1850cs, bought for 0.0984 and 0.0994 in 1k.
EUROZONE DATA: February IP Data Stronger-than-expected, But Stale
Eurozone February industrial production was 1.1% M/M, above the 0.3% consensus thanks to a 10.8% M/M print in Ireland. January’s reading was revised two tenths lower to 0.6%. The IP data is of course stale, with market expectations for Eurozone manufacturing prospects being heavily dictated by volatile US tariff policies. Nonetheless, 3m/3m IP growth reached its highest since November 2022 at 0.2% (vs -0.3% prior).
- The Eurozone manufacturing PMI remained contractionary at 48.6 in March (vs 47.6 in February), with similar dynamics observed in the EC’s industrial confidence metrics.
- As such, although IP momentum was improving through Q1, future prospects remain relatively bleak for the export-heavy manufacturing industry.
- Non-durable consumer goods saw a notable 2.8% M/M rebound (vs -2.4% in January, 6.0% in December).
