ECB: Vujcic Sees March and April As Key, Especially For Services Inflation
Feb-07 12:52
- Speaking on Bloomberg TV, ECB’s Vujcic offers a little more colour around yesterday’s comments that he doesn’t feel uncomfortable with market pricing.
- He repeats that market bets on three rate cuts “not unreasonable” whilst adding that March and April will be key for a clearer picture on the rate path. The latter is primarily from a data perspective and services inflation in particular.
- Tariff threats are a great source of uncertainty but US tariffs wouldn’t immediately trigger a 50bp cut when asked directly on the scenario.
- He notes the ECB has already seen “some wage moderation” and expects this to continue in a trend that will help bring inflation down over time, consistent with central ECB communications.
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Historical bullets
US TSY FUTURES: BLOCK: Mar'25 2Y/10Y Steepener
Jan-08 12:49
- Latest Block crossed at 0724:55ET:
- +2,500 TUH5 102-22.12, post time offer vs.
- -3,000 TYH5 107-30, through 107-30.5 post time bid
- The 2s10s curve has climbed to 41.621 this morning, highest since May 16, 2022
GBP: EURGBP Rally Highlights Potential for Stronger Reversal
Jan-08 12:44
- Despite the underlying dollar bid, the underperformance for UK assets has prompted a solid uptick for EURGBP on Wednesday, and a firm break above resistance at 0.8311, the 50-day EMA.
- We have reached a high of 0.8348 so far, and this represents a six-week high for the cross. Price action today undermines the dominant bear theme and highlights the potential a stronger reversal. Further weakness below the 2024 highs in cable would likely add to the topside momentum in EURGBP.
- Above here, the focus will be on 0.8376, the Nov 19 high and technical bull trigger.
BUND TECHS: (H5) Clears Key Support
Jan-08 12:43
- RES 4: 137.75 Low Dec 10
- RES 3: 135.15 High Dec 13
- RES 2: 133.90 20-day EMA
- RES 1: 132.57/133.48 High Jan 6 / 3
- PRICE: 131.55 12:27 GMT Jan 8
- SUP 1: 131.50 Intraday low
- SUP 2 131.28 Low Nov 14 ‘24 (cont)
- SUP 3: 131.00 Round number support
- SUP 4: 130.58 Low Nov 6 ‘24 and a key support
The trend cycle in Bund futures remains bearish and this week’s extension reinforces this theme. The contract has breached key support at 132.00, the Nov 6 low. A clear break of this level strengthens a bearish theme. Sights are on a move towards 131.28 next, the Nov 14 low on the continuation chart. Initial resistance is at 132.57, the Jan 6 high. Key short-term resistance is at 133.90, the 20-day EMA.
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