WTI TECHS: (X5) Resumes Its Downtrend
- RES 4: $74.79- 2.500 proj of the Apr 9 - 23 - May 5 price swing
- RES 3: $73.39 - High Jun 23 and a bull trigger
- RES 2: $66.42/68.43 - High Sep 29 and key resistance / High Jul 30
- RES 1: $62.92 - High Oct 8
- PRICE: $59.96 @ 14:33 BST Oct 10
- SUP 1: $60.40 - Low Oct 2
- SUP 2: $57.50 - Low May 30
- SUP 3: $54.89 - Low May 5
- SUP 4: $54.10 - Low Apr 9 and a key support
A bearish theme in WTI futures remains intact. Today’s move down has confirmed a resumption of the bear leg - support at $60.40, the Oct 2 low, has been breached. This highlights an extension of the bearish price sequence of lower lows and lower highs. The move down opens $57.50 next, the May 30 low. On the upside, initial firm resistance is at $66.42, the Sep 29 high. Clearance of this level would highlight a reversal.
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BONDS: Bunds & Gilts Away From Lows Following U.S. PPI
Post-PPI cues from U.S. Tsys leads Bunds & gilts away from session lows, although benchmark 10-Year futures for both markets are nowhere near testing pre-existing session highs.
- German yields back to little changed on the day across the curve, while the gilt curve bear flattens (yields 1-3bp higher on the session).
US: Congress Edges Closer To Funding Deal After White House Details 'Anomalies'
The implied probability of a government shutdown on October 1 dipped below 40% after White House officials gave Congressional Republicans the green light to move forward with funding negotiations if White House 'anomalies' are included. While the baseline expectation now leans toward a deal, the risk remains elevated.
- Politico reports the Trump administration and hardline House conservatives want a stopgap funding plan through January 31 or beyond. Appropriators want a shorter continuing resolution to allow for full-year funding negotiations.
- Senate Minority Leader Chuck Schumer (D-NY) remains adamant he won’t swallow another partisan funding extension after being panned for folding in a March standoff.
- This time around, Schumer and House Minority Leader Hakeem Jeffries (D-NY) are aligned on their priorities but it is not immediately clear what concessions from the GOP could facilitate a deal beyond extending expiring Affordable Care Act (Obamacare) tax credits, which GOP Leader John Thune (R-SD) appeared to rule out yesterday.
- Punchbowl writes, “This is a growing political problem for moderate Republicans, as more than four million Americans could lose coverage without the subsidies. Rank-and-file Democrats say an extension of Obamacare credits is their minimum demand...”
- Axios writes, “The pressure is rising on Democrats to stiff President Trump and let the government shut down on Oct. 1… a shutdown fight might be the only action that appeases their deeply unsatisfied party base.”
Figure 1: Government Shutdown by October 1
Source: Polymarket
EQUITIES: NASDAQ E-Mini Leads Way Higher Following Oracle Guidance
E-mini futures point to positive opens on Wall Street despite edging away from best levels. Oracle indicated ~35% higher pre-market after a guidance upgrade linked to the company’s cloud business outlook.
- S&P 500 e-minis: +0.52%
- NASDAQ 100 e-minis: +0.57%
- DJIA e-minis: unch
