EU-RUSSIA: Slovak PM Hints He Will Not Veto 19th Sanctions Package
Reuters reports comments from Slovak PM Robert Fico, claiming that his gov't can support the EU's 19th sanctions package against Russia, "If we see the demands we pushed for in the summit conclusions." As Euronews reported on 20 Oct, "The latest conclusions from the upcoming EU summit add more detailed references to energy prices and the automotive sector, the two issues that Slovak PM Robert Fico had raised as condition [sic] for lifting his veto."
- Fico has not raised objections to the actual provisions of the proposed 19th package of sanctions, which are largely intended to hit Russian LNG flows, oil infrastructure, its "shadow fleet" of ageing tankers and crypto platforms, as well as impact the movements of Russian diplomats.
- Instead, the Slovak PM has demanded that the EU "substantially" discuss high energy prices, the struggling European auto sector, and EU competitiveness. Fico argued these topics are often left to the end of any conclusions and not given enough time for discussion when compared to the war in Ukraine.
- As MNI's Policy team reported previously, "European leaders will signal a more pragmatic approach on the green transition in order to mute its impact on industrial competitiveness when they meet in Brussels later this week, draft summit conclusions show." (see 'MNI: EU Summit Draft Shows Pragmatism On Green Transition', 20 Oct).
- The gov't in Vienna withdrawing Austria's objection to the sanctions could pave the way for a vote to implement the latest package soon.
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GILTS: Little Changed Early Today
Gilt futures trade through Friday’s lows & first support (90.65), before basing at 90.60 and recovering back above 90.70
- Yields 0.5-1.0bp lower, curve bull steepens, consolidating the steepening seen in the second half of last week.
- 10s outperform both Tsys & Bunds at the margin, cross-market cues are providing the early impetus this week.
- Little of note on the local news front over the weekend, after Friday’s PSNB data revealed the latest instance of fiscal deterioration.
- We look at the implications of the BoE’s decision to target a GBP70bln APF reduction over the next year and will be watching ILTR/STR operations closely in coming weeks as supply-led reserve balances move below the top of the Bank's PMRR (preferred minimum range of reserves).
- Comments from BoE chief economist Pill are due this afternoon (13:30 London), followed by comments from Governor Bailey (19:00 London). Expect Pill’s comments to be of greater interest for markets, as he speaks on monetary policy frameworks, while Bailey speaks on supervisory matters.
SILVER TECHS: Fresh Cycle High
- RES 4: $45.128 - 3.236 proj of the Jul 31 - Aug 14 - 20 price swing
- RES 3: $44.533 - 3.000 proj of the Jul 31 - Aug 14 - 20 price swing
- RES 2: $44.000 - Round number resistance
- RES 1: $43.773 - Intraday high
- PRICE: $43.548 @ 08:16 BST Sep 22
- SUP 1: $41.052 - 20-day EMA
- SUP 2: $39.402- 50-day EMA
- SUP 3: $36.965 - Low Aug 20
- SUP 4: $36.216 - Low Jul 31 and a key support
Trend signals in Silver remain bullish. The metal is trading higher as the bull cycle extends. Note that moving average studies are in a bull-mode position, reinforcing current conditions. Sights are on the $44.00 handle next. Clearance of this level would pave the way for a climb towards 44.533, a Fibonacci projection. Initial firm support to watch lies at $41.052, the 20-day EMA.
USDCAD TECHS: Remains Above Support For Now
- RES 4: 1.4019 38.2% retracement of the Feb 3 - Jun 16 bear leg
- RES 3: 1.3925 High Aug 22 and the bull trigger
- RES 2: 1.3890 High Sep 11
- RES 1: 1.3848 High Sep 15
- PRICE: 1.3800 @ 08:07 BST Sep 22
- SUP 1: 1.3727 Low Aug 29 and a bear trigger
- SUP 2: 1.3709 61.8% retracement of the Jul 23 - Aug 22 bull cycle
- SUP 3: 1.3658 76.4% retracement of the Jul 23 - Aug 22 bull cycle
- SUP 4: 1.3637 Low Jul 25
A sharp sell-off in USDCAD early last week resulted in a break of the 20-and-50-day EMAs. This undermines a recent bullish theme and exposes key short-term support at 1.3727, the Aug 27 low. A clear break of this level would strengthen a bearish threat and signal scope for a deeper retracement. For bulls, resistance levels to watch are; 1.3890, the Sep 11 high, and 1.3925, the Aug 22 high and bull trigger.
