GILT TECHS: (U5) Fresh Short-Term trend Low

At current interest rates, ECB's Nagel sees the Governing Council well positioned to react to any shocks threatening price stability, reiterating the ECB should remain data-dependent:

• "In my view, this interest rate level puts us in a very good position to respond to a wide range of developments."
• "The current price data and inflation forecasts signal that the mission has been accomplished. We in the Governing Council can be very satisfied with this. However, we cannot afford to sit back and relax. Rather, we must keep our eyes and ears open for risks to price stability."
• "Given that crucial factors can change rapidly in the current environment, we would be well advised to remain flexible. This means that it does not make sense to make any predetermined decisions – neither on a further interest rate cut nor on maintaining the status quo in monetary policy. We should continue to make decisions on a meeting-by-meeting basis depending on the data and not rush into anything."
• "I am confident that inflation will stabilize at 2 percent in the long term and that we will thus achieve our medium-term inflation target. [...] A sustained undershooting is unlikely. The underlying inflation and, above all, the increase in the cost of services are too high for that."
• "German fiscal policy is likely to dampen inflation noticeably in the short term when relief measures such as the reduction in electricity tax or grid fees come into effect. On the other hand, higher spending on defense and infrastructure could drive aggregate demand and, indirectly, consumer prices in the medium term."

Elsewhere, he remains within common themes re the economic outlook in Germany - but sees some upside vs Bundesbank's recent 2025 forecast:

• "According to our recent forecast for Germany, the economy will remain flat on average for the current year. However, this forecast did not take into account the fact that the revised growth rate for the first quarter is now twice as high as originally reported. A slight increase in overall economic performance therefore seems quite possible on an annual average."
• "Economic output is likely to stagnate in the second quarter. Exports are undoubtedly suffering from US tariff policy. In addition, industrial capacity utilization is comparatively low. Accordingly, companies have relatively little incentive to invest. Furthermore, private household consumption is currently subdued. This is because the labor market is tending to deteriorate and wages are no longer rising as strongly."

• After clearing the 131.52 level, Bund is seeing a pick up in Volumes, sold in 5k through new lows.
• The Bid in Risk has been the early driver, although other Investors might look at Inflationary Risks through Commodity Markets (Oil).
• The main initial target is still eyed at the 2.60% level.

Today, reference 130.27:

• 2.60% = 130.05.

• RES 4: $37.478 - High Mar 2012  
• RES 3: $37.195 - 2.236 proj of the May 15 - 22 high / low price swing
• RES 2: $36.987 - 1.000 proj of the Apr 7 - 25 - May 15 price swing
• RES 1: $36.886 - High Jun 9 
• PRICE: $36.455 @ 08:13 BST Jun 16 
• SUP 1: $34.842 - 20-day EMA
• SUP 2: $33.743/31.651 - 50-day EMA / Low May 15
• SUP 3: $30.915/28.351 - Low Apr 11 / 7 and the bear trigger  
• SUP 4: $27.686 - Low Sep 6 ‘24  

A bull wave in Silver remains in play and recent strong gains plus last Monday’s extension, reinforce this condition. The metal has traded through a resistance at $34.903, the Oct 23 ‘24 high and a key bull trigger. The clear break of it marks an important medium-term bullish development. Sights are on $36.987 next, a Fibonacci projection. Initial support to watch lies at $34.842, the 20-day EMA.