ENERGY: What to Watch: OPEC MOMR, ARA Crude & US Oil Stocks, US CPI

ECB-dated OIS have held onto the dovish repricing seen into Friday’s close, with US President Trump’s weekend tariff threats on steel/aluminium imports keeping the pressure on EUR implied rates. 87bps of ECB easing are priced through year-end at typing.

• OIS continue to fully price a 25bp cut in March, with 19bps of sequential cuts priced through the April and June decisions. 25bp cuts at the next three gatherings would bring the deposit rate to 2.00%, in the middle of the ECB’s heavily caveated 1.75-2.25% neutral range.
• In a podcast with Bloomberg released Friday, ECB Chief Economist Lane described neutral as a “hypothetical conjecture”, as it assumes a shock-free economy. In Lane’s words: “What's the probability the world won't face any more shocks in the next year?”.
• Euribor futures are -0.5 to +1.5 ticks through the blues, with a light flattening bias seen.
• The February Sentix survey is due at 0930GMT, but isn’t usually a market mover. That leaves focus on ECB President Lagarde’s appearance at the EU Parliament at 1400GMT. 

The long end of the ASW spread curve continues to trade heavily, both in relative terms against Schatz and outright.

• Buxl ASW vs. 3-month Euribor registered a fresh cycle closing low on Friday, with increased free float and German issuance/fiscal risks continuing to weigh.
• These fundamental sources of pressure mean that relief episodes in long swap spreads remains contained, even when bonds manage to rally in outright trade.
• Meanwhile, repo/collateral dynamics have seemingly been binding in the front end of the ASW curve, preventing Schatz spread tightening towards ’24 lows.
• Still, J.P.Morgan go against the trend and recommend a tactical Bund swap spread paid position against the Schatz equivalent, given what they deem to be “attractive valuations.” They also suggest that their “2s/10s German cash bond curve flattening bias is also supportive of a steeper swap spread curve.”

• RES 4: $34.903 - High Oct 23 and the bull trigger  
• RES 3: $33.450 - 76.4% of the Oct 23 - Dec 19 ‘24 bear leg
• RES 2: $33.000 - Round number resistance   
• RES 1: $32.652 - High Feb 7                                 
• PRICE: $32.160 @ 08:11 GMT Feb 10   
• SUP 1: $30.814 - 50-day EMA        
• SUP 2: $29.704 - Low Jan 27 
• SUP 3: $28.748 - Low Dec 19 and bear trigger
• SUP 4: $28.446 - 76.4% retracement of the Aug 8 - Oct 23 bull cycle 

Silver traded higher last week. Key resistance at $32.338, the Dec 12 high, has been pierced. Clearance of this hurdle would highlight a stronger reversal and cancel a recent bearish theme. This would open the $33.00 handle and expose $33.450, a Fibonacci retracement. Initial firm support lies at $30.814, the 50-day EMA and a pivot level. A clear break of the EMA would reinstate the recent bearish theme.