EUROZONE: Timeline of key events (Times GMT)

• RES 4: 1.3835 High Oct 20 and key resistance
• RES 3: 1.3703/49 200-dma / High Jan 13
• RES 2: 1.3662 High Jan 20
• RES 1: 1.3644 High Feb 10
• PRICE: 1.3541 @ 06:15 GMT Feb 14
• SUP 1: 1.3491 Low Feb 7
• SUP 2: 1.3435 Low Feb 1
• SUP 3: 1.3358 Low Jan 27 and the bear trigger
• SUP 4: 1.3301 76.4% retracement of the Dec 8 - Jan 13 bull phase

GBPUSD is trading inside its recent range and above support at 1.3491, Feb 7 low. The outlook remains bullish following recent gains from 1.3358, Jan 27 low and scope is seen for a test of 1.3662 next, Jan 20 high. On the downside, a breach of 1.3491, Feb 7 low would threaten the current bull theme and expose key support at 1.3358, Jan 27 low. This is the trigger for a resumption of bearish pressure.

A lack of outright escalation surrounding the Russia-Ukraine situation, in addition to an apparent continued push for a diplomatic solution re: the matter (summary of the situation here) saw core global FI markets back from late Friday/early Asia highs, with e-mini futures lodging gains of ~0.2% overnight (initially showing lower) after Friday’s sharp risk-off move surrounding the same Russia-Ukraine worry. TYH2 is unch. at 126-12+, with cash Tsys running 1.0-3.0bp cheaper across the curve (2s lead the weakness, while the 5- to 10-Year zone lags). Asia-Pac flow was headlined by a block buy of TU futures (+6,747).

• Elsewhere, weekend comments from San Francisco Fed President Daly once again played down the need for a 50bp hike in March (as per the MNI interview with Daly on Thursday). She pointed to the need for lift off in March (given the “obvious need” to remove accommodation), coupled with a data-dependent stance thereafter, not committing to a view re: the number of hikes required in ‘22.
• To recap, U.S. worry surrounding the potential for a relatively imminent invasion of Ukraine by Russia supported Tsys in late Friday dealing, with the major benchmarks running 7.5-9.5bp richer come the close, as the 5- to 10-Year zone of the curve led the bid. Also helping the bid was confirmation that the Fed would taper QE purchases as expected, which removed fears re: the potential for inter-meeting rate hikes.
• Looking ahead, Monday’s NY docket will be headlined by a television address from St. Louis Fed President Bullard (’22 voter, hawk). A reminder that Bullard pointed to the potential for an inter-meeting rate hike in the wake of Thursday’s CPI print, in addition to calling for 100bp of tightening by the start of July. There will of course be continued focus on the Russia-Ukraine situation, which presents the obvious source of headline risk.