COMMODITIES: Trend Condition for Gold Remains Bullish
The trend condition in Gold remains bullish and the latest pull back appears to have been a correction. Moving average studies are unchanged, they remain in a bull-mode position highlighting a dominant uptrend. A bearish theme in WTI futures remains intact and yesterday’s rally from the day low is - for now - considered corrective. The move higher is allowing an oversold trend condition to unwind. Recent weakness has resulted in the breach of a number of important support levels.
- WTI Crude down $2.06 or -3.3% at $60.27
- Natural Gas down $0.12 or -3.25% at $3.692
- Gold spot up $26.36 or +0.86% at $3108.85
- Copper up $15.45 or +3.69% at $434.7
- Silver down $0.07 or -0.23% at $30.9595
- Platinum up $0.93 or +0.1% at $937.27
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GERMAN AUCTION PREVIEW: 2.20% Mar-27 Schatz
This morning, Germany will hold its fourth Schatz auction of the year. On offer will be E4.5bln of the 2.20% Mar-27 Schatz.
- The E4.5bln size is in line with the last Schatz auction on February 18.
- Recent Schatz auctions have passed smoothly, with solid bid-to-covers (in a 2.09x to 2.81x range since August), bid-to-offers (1.69x to 2.17x range since August) and the low prices above the secondary market mid-prices throughout 2024/5 (low price equal to mid-price on the last Schatz auction in February, but the auction passed smoothly).
- For the last Schatz auction on 18 February, the bid-to-cover stood at 2.68x, while the bid-to-offer came in at 2.11x.
- The fiscal situation in Germany is characterized by some uncertainty at the moment as an announcement on additional military and infrastructure spending last week saw German yields jump across the curve - however, for the announced deal to pass, approval from party "the Greens" is likely needed, who today have mentioned they are ready to negotiate after rejecting the initial CDU/CSU/SPD draft proposal earlier. We'd expect today's auction to pass smoothly nonetheless.
- Schatz positioning currently is short (indeed there is short positioning across the German curve) see our latest Europe PI below.
- The next German auction will be tomorrow's E4.5bln of the 2.50% Feb-35 Bund (ISIN: DE000BU2Z049), while the 2.20% Mar-27 Schatz will be reopened next on April 1, for another E4.5bln.
- Timing: Results will be available shortly after the bidding window closes at 10:30GMT / 11:30CET.
NORWAY: Finance Ministry Revises 2025 Mainland GDP Projection Down To 2.0%
The Norwegian finance ministry revised its 2025 mainland GDP growth projection down by 0.3pp to 2.0% Y/Y compared to its October forecast round, while the 2026 mainland GDP projection was revised a tenth higher to 2.2%. The softer outlook for 2025 reflects a sharp downward revision to housing investment (-4.7% vs 12.1% in October), which was offset a little by upgrades to consumption and government spending.
- The 2025 GDP forecast (including offshore sectors) was 0.6% Y/Y (vs 2.1% in October), reflecting much lower crude oil and natural gas export expectations (-2.0% Y/Y vs 1.5% in October).
- The registered unemployment projections were revised a tenth lower for 2025 and 2026 to 2.1%.
- Today’s forecast updates come as the Government kicks off work for the 2026 state budget.
- From the press release: “Next year's budget will be characterized by the fact that we live in turbulent times, with the ongoing war in Ukraine, international unrest and the risk of increasing trade conflicts”….“We must strengthen our defense to secure Norway.
- “Next year's budget must be based on the fact that growth is on the rise. The government will pursue a responsible economic policy that facilitates a further decline in price inflation, increased purchasing power for households, and strengthened competitiveness for companies”.
