AUTOMOTIVE: Stellantis (STLA Baa1[N]/BBB/BBB): Fitch Downgrade

The Eurozone-wide services PMI saw a small downward revision to 50.6 (vs 50.7 flash, 51.3 prior), with a downward revision in Germany outweighing a smaller upward revision in France. The Spanish and Italian prints were stronger than consensus expectations, but this doesn’t necessarily imply an upward revision to the flash reading.

• A key theme in the services PMIs across the four major Eurozone economies were increased input costs, largely driven by labour costs. These cost increases were passed into output charges, most notably in Spain and Italy.
• The ECB has expressed considerably confidence in the 2025 compensation outlook (which should help drive disinflation in services), so these signals from the PMI are worth monitoring over the coming months.
• Meanwhile, services employment increased in Germany, Spain and Italy, but fell in France.

• MNI: EUROZONE FINAL FEB SERVICES PMI 50.6 (FLASH: 50.7); JAN 51.3
• MNI: EUROZONE FINAL FEB COMPOSITE PMI 50.2 (FLASH: 50.2); JAN 50.2

• RES 4: 119.040 High Feb 28 and a reversal trigger        
• RES 3: 118.950 High Mar 3        
• RES 2: 118.310 Low Mar 3    
• RES 1: 118.090 Intraday high                               
• PRICE: 117.870 @ 08:40 GMT Mar 5 
• SUP 1: 117.650 Intraday low    
• SUP 2: 117.600 Round number support 
• SUP 3: 117.490 2.00 proj of the minor Feb 28 - Mar 3 - 4 price swing  
• SUP 4: 117.318 2.236 proj of the minor Feb 28 - Mar 3 - 4 price swing     

Bobl futures are trading sharply lower this morning. The contract has gapped down and price action is likely to remain volatile near-term. A key short-term support at 117.850, the Feb 20 low, has been pierced. This undermines a recent bullish theme. A continuation lower would signal scope for an extension towards the 117.600 handle. On the upside, key short-term resistance has been defined at 119.040, the Feb 28 high.