EU FINANCIALS: Sydbank: 2Q25    

• RES 4: 1.1923 2.000 proj of the Feb 28 - Mar 18 - 27 price swing
• RES 3: 1.1917 2.0% 10-dma envelope
• RES 2: 1.1851 High Sep 10 2021 
• RES 1: 1.1749/1829 High Jul 24 / 01 and the bull trigger 
• PRICE: 1.1665 @ 10:40 BST Jul 28
• SUP 1: 1.1658 Intraday low
• SUP 2: 1.1559/57 50-day EMA / Low Jul 17
• SUP 3: 1.1446 Low Jun 19
• SUP 4: 1.1405 Low Jun 11  

EURUSD is trading lower today. The pair has breached support at the 20-day EMA, at 1.1684. The next key support to watch lies at the 50-day EMA, at 1.1559. A clear break of this average is required to signal a stronger reversal. Note that medium-term trend indicators continue to highlight a dominant uptrend. A resumption of gains would refocus attention on 1.1829, the Jul 1 high and the bull trigger.

Bloomberg runs the below headlines from ECB’s Kazimir in an op-ed for the Slovakia central bank’s website. 

• "*KAZIMIR: DON'T EXPECT ANYTHING FORCING ECB CUT AS SOON AS SEPT." - BBG
• "*KAZIMIR: UPSIDE INFLATION RISKS PERSIST, WARRANT VIGILANCE"
• "*KAZIMIR: TRADE DEAL `WELCOME NEWS,' CAN HELP LIFT UNCERTAINTY"
• "*KAZIMIR: MAJOR HIT TO LABOR MARKET COULD FORCE ECB ACTION"
• "*ECB'S KAZIMIR: PRE-COMMITTING WOULD BE A `FOOL'S ERRAND'"

This is the first update in over a month for Kazimir, with his latest two-sided comments broadly in keeping with his prior outlook. From Jun 24: “I belong to the governors who think we’ve reached our goal, that we are at the neutral range,”….“I personally would not touch rates before we’ll have a much clearer picture regarding trade-war scenarios.”

Sources pieces since last week's ECB meeting have touched on the high bar seen for the September meeting (for which there is currently just 4bp of cuts priced vs 10bp prior to Thursday's ECB press conference). 

Core global FI markets reversed the Asia-Pac gap lower, with the inflation readthrough in the wake of the U.S.-EU trade deal and some ongoing questions surrounding trade between the two eventually outweighing any growth boost when it comes to bonds.

• Benchmark global equity index futures have eased back from Asia-London handover highs but remain comfortably firmer on the day.
• Bund futures as high as 129.74, bulls unable to test the 20-day EMA (129.97). Bears remain in technical control, Friday’s multi-month low (128.84) provides initial support.
• German yields are 2-3bp lower, belly and intermediates outperform. 10s hold below 2.75% after Friday’s brief move above.
• EGB spreads to Bunds little changed to 1bp tighter, aided by firmer equities.
• Gilts follow cues from peers with little in the way of meaningful UK news flow. Futures as high as 91.85, last +31 at 91.77. Initial resistance at the 20-day EMA (91.92) goes untested. Initial support comes in at the July 24 low (91.18).
• UK yields 1-4bp lower, curve flatter. 10s ~1bp wider vs. Bunds.
• ECB & BoE pricing little changed after the recent hawkish adjustments, 16bp of ECB easing showing through year-end, ~46bp of BoE cuts priced over the same horizon.
• Focus is on wider macro matters (any ongoing adjustment to the U.S.-EU trade deal and Sino-U.S. discussions in Stockholm).
• Note the BoE will sell GBP750mln of medium-dated gilts from its APF this afternoon.
• Plenty of EUR event risk as the week moves on, with the ECB’s inflation expectations survey (Tuesday), wage tracking data & (Wednesday), Eurozone GDP (Wednesday) & Eurozone HICP (Friday) all eyed.