EU: Spain Expects Agreement On EU Fiscal Rules By End Of 2023
Spanish Finance Minister, Nadia Calvino, has told reporters on the sidelines of an EU finance ministers' meeting in Santiago de Compostela, Spain that she expects to European Union members to reach a new agreement on fiscal rules by the end of the year.
- Calvino: "What we will do is lay out an ambitious calendar to have an agreement by the end of the year under the Spanish presidency."
- The rules are set to set to be reinstated in 2024 after suspension in 2020 to allow for greater fiscal headroom to manage the response to COVID-19.
- Reuters reported last week: "[The rules] are now under review to adapt them to the new realities of high public debt and large investment needs. Officials say work is progressing, but there are some fundamental differences between France and Germany on their future shape."
- Calvino said last week: "I am quite confident we can find an agreement. There is a unanimous acknowledgement that we need to have them in place by the end of the year."
- Spain holds the rotating presidency on the Council of EU until Dec 31 2023.
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USDCAD TECHS: Continues To Appreciate
- RES 4: 1.3655 High May 26 and a key resistance
- RES 3: 1.3585 High Jun 1
- RES 2: 1.3523 76.4% retracement of the May 26 - Jul 14 downleg
- RES 1: 1.3510 Intraday high
- PRICE: 1.3500 @ 08:07 BST Aug 16
- SUP 1: 1.3413 Low Aug 11
- SUP 2: 1.3351 20-day EMA
- SUP 3: 1.3320 Low Aug 4
- SUP 4: 1.3266 Low Aug 2
USDCAD short-term conditions remain bullish and the pair is trading higher. Attention is on 1.3523, a Fibonacci retracement point. Clearance of this level would strengthen current bullish conditions and pave the way for a climb towards 1.3585, the Jun 1 high. Initial firm support to watch is 1.3351, the 20-day EMA. A short-term pullback would be considered corrective and this would allow an overbought condition to unwind.
AUDUSD TECHS: Trades Through Key Support
- RES 4: 0.6723 High Aug 1
- RES 3: 0.6652 50-day EMA
- RES 2:0.6593 20-day EMA
- RES 1: 0.6522 High Aug 15
- PRICE: 0.6462 @ 08:01 BST Aug 16
- SUP 1: 0.6428 Intraday low
- SUP 2: 0.6403 76.4% retracement of the Oct 13 ‘22 - Feb 2 bull leg
- SUP 3: 0.6387 Low Nov 10 2022
- SUP 4: 0.6285 Low Nov 4 2022
Short-term AUDUSD trend conditions remain bearish and today’s move lower reinforces the current bearish theme. The pair has breached support at 0.6458, the May 31 low and bear trigger. This reinforces a downtrend and paves the way for weakness towards 0.6403, a Fibonacci retracement point. On the upside, resistance to watch is at 0.6522, yesterday’s low. A firmer resistance is at the 20-day EMA - at 0.6593.
BUNDS: Commerzbank On The German Deposit Situation
Commerzbank note that “this morning's Bundesbank data on domestic public deposits will be closely scrutinized.”
- “Following the drop of €16bn to a level of €38bn during the week before the Bundesbank announcement, they only declined by €2.1bn after the 0% surprise. Although one can still make the case that this implies some €5bn in deposit withdrawal given the pre-Covid seasonality (i.e. typical increase at this stage of the year), the modest decline suggests that there has been no major rotation so far.”
- “This fits the lack of BuBill richening since last week as well as our view that the remaining deposits are rather sticky. That being said, if the deposit decline continues next week, the story would be different as even last year during the deposit rotation there was a €21bn deposit increase in mid-August.”
- “In that case, this would suggest there is no notable rotation into BuBills this time around so far, effectively breaking the pattern highlighted on the scatter below. The jury hence remains out and implies 2-way volatility.”
