EUROPEAN PARLIAMENT: VdL, Costa Address Plenary As US Trade Deal Suspended
Commission President Ursula von der Leyen is addressing MEPs at the plenary session in Strasbourg. Livestream. MEPs are formally suspending the ratification of the EU-US trade pact agreed in the summer of 2025 and announced at a meeting between VdL and US President Donald Trump in Scotland due to the heightened tensions over Greenland and Trump's threat of additional tariffs.
- A short time ago, European Council President António Costa said, "We are united around the principles of international law...We are united in full support and solidarity with the Kingdom of Denmark and with Greenland...We recognise that there is a shared transatlantic interest in peace and security in the Arctic, notably working through NATO...further tariffs would undermine transatlantic relations and are incompatible with the EU-US trade agreement."
- Costa: "We stand ready to defend ourselves, our member states, our citizens, our companies, against any form of coercion...We want to continue engaging constructively with the United States...We cannot accept that the law of the strongest prevails over the rights of the weakest...Alliances cannot just boil down to a sequence of transactions...We cannot accept violations of international law anywhere, whether in Ukraine, Greenland, Latin America, Africa or Gaza."
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STIR: Markets Still Price ~25% Odds Of ECB Rate Hike In '26
Modest hawkish drift in EUR STIRs this morning as 10-Year Bund yields pierce 2.90% for the first time since March.
- Post-decision ECB Governing Council communique has reaffirmed the idea that policy settings are “in a good place”.
- Accordingly, the bar to a policy move in either direction looks to be high at present. Markets lean in favour of the next move being a hike, but not until 2027 at the earliest.
- ECB-dated OIS is little changed, calling time on the easing cycle and showing ~6.5bp of tightening for ’26.
- Meanwhile, Euribor futures are flat to -1.5. ERZ6 is 6.5 off lows that came in the sessions after Executive Board member Schnabel outlined her comfort with the market pricing rate hikes as the next move.
- Comments from ECB’s Vujcic & Kazimir are due later.
ECB Meeting | €STR ECB-Dated OIS (%) | Difference Vs. Current Effective €STR (bp) |
Feb-26 | 1.938 | +0.5 |
Mar-26 | 1.932 | -0.1 |
Apr-26 | 1.928 | -0.5 |
Jun-26 | 1.923 | -1.0 |
Jul-26 | 1.932 | -0.1 |
Sep-26 | 1.945 | +1.2 |
Oct-26 | 1.965 | +3.2 |
Dec-26 | 1.999 | +6.6 |
GILT TECHS: (H6) Resistance Intact For Now
- RES 4: 92.55 High Nov 11
- RES 3: 92.31 High Nov 12
- RES 2: 92.00 Round number resistance
- RES 1: 91.78/93 High Dec 17 / High Nov 27
- PRICE: 90.74 @ 08:02 GMT Dec 22
- SUP 1: 90.50 Low Dec 16
- SUP 2: 90.28 Low Nov 21
- SUP 3: 90.00 Round number support
- SUP 4: 89.86 Low Nov 19 and the bear trigger
Recent activity in Gilt futures highlights 90.50, the Dec 16 low, and 91.93, the Nov 27 high, as two important short-term directional triggers. A clear breach of support at 90.50 would signal scope for a deeper retracement towards 89.86, the Nov 19 low and a bear trigger. For bulls, a stronger resumption of gains and a breach of 91.93, would instead signal scope for a climb towards resistance at 92.55, the Nov 11 high.
USDCAD TECHS: Bear Flag
- RES 4: 1.4051 High Nov 28
- RES 3: 1.3920 50-day EMA
- RES 2: 1.3865 20-day EMA
- RES 1: 1.3823 High Dec 11
- PRICE: 1.3780 @ 08:01 GMT Dec 22
- SUP 1: 1.3730 Low Sep 17
- SUP 2: 1.3682 76.4% retracement of the Jun 16 - Nov 6 bull cycle
- SUP 3: 1.3637 Low Jul 25
- SUP 4: 1.3576 Low Jul 23
A bear theme in USDCAD remains intact, reinforced by the recent move down and note that price is holding on to the bulk of its latest downleg. The latest pause appears to be a flag - a bearish continuation pattern. Scope is seen for an extension towards 1.3727 next, the Sep 17 low. Initial firm resistance to watch is 1.3865, the 20-day EMA. Short-term gains would be considered corrective and would allow an oversold condition to unwind.
