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The uptrend is running out of steam as the daily momentum chart is weakening, showing a series of lower peaks. However, as long as prices are successfully consolidating above the lower end of the rising trend channel around 128.00 and the horizontal support around 127.85 there is a possibility of making new short-term highs. A clear break above the 130.00 level will confirm a continuation of the uptrend, but the upside potential remains limited. Overhead horizontal resistance comes in between 130.70 and 131.70. There are short-term bullish targets at 131.10 and 132.30.
Discover what ING analysts are looking for next week in our global economic calendars
We expect the Czech National Bank to remain on hold next Thursday for the same reason it held rates steady in February: an uncertain global environment. The CNB board is likely to wait for a new forecast in May before any policy reaction. This should outweigh the weaker-than-expected Czech koruna and higher core CPI
The Bank of Russia kept the key rate at 7.75% and slightly improved the YE19 CPI outlook by 0.3 percentage points to around 5.0%. This is in line with our expectations but not as aggressive as some market participants hoped for. We believe the actual list of upside risks to CPI is longer than those listed by the CBR, making a rate cut before 4Q19 highly unlikely
Moody's yesterday upgraded the covered bond ratings of Liberbank from A1 to Aa2. The rating action follows the upgrade of the bank's Counterparty Risk Assessment (CRA) from Ba1(cr) to Baa3(cr) on the same day. Moody's decided to upgrade the CRA and long-term deposit ratings (the latter from Ba3 to Ba2) of Liberbank based upon the bank's improved credit profile.
The March decline in the eurozone's PMI indicates the bloc's economic problems are far from over, as Feburary's increase was taken as a sign of things bottoming out
EU leaders have granted an extension to the Article 50 negotiating period, piling the pressure on the UK Parliament to agree a way forward on Brexit. The question is: will a majority of British MPs settle on a course of action before the EU's 12 April deadline?
CDS Performance, Sector Performance and Events Calendar
Euro Credit asset swap spreads and performance
Deutsche Bank (DB) warned that the market conditions in the beginning of the year have improved as compared to those experienced in 4Q18 but are somewhat weaker than the bank had anticipated. The bank expects its revenues to be slightly higher in 2019 than in 2018 assuming solid economic growth. Earlier this week UBS indicated its 1Q has been one of the worst in recent history and that its revenues in its investment bank declined by a third.
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The weekly close above the horizontal resistance barrier at 159.80 suggests a resumption of the long-term uptrend. Next resistance at the upper end of the 3 year rising trend channel around the 169.75 area with the long-term rising trend channel showing resistance around 176.30 at the upper end of this channel. This is in line with our long-term bullish target for the coming months at 167.70.
Strong 1-year T-bills auction
Our economists expect he CBR to remain on hold today. Feb inflation of 5.2% YoY (and most likely 5.4-5.5% YoY in March) is comfortably within the central bank's ‘line in the sand' of 6%, economic activity remains subdued and markets conditions haven't really deteriorated since the previous meeting. Equally, the downward rate cycle seems remote as the gasoline price freeze expires at the end of March, leaving the mid-term CPI trend uncertain, while finally mid-term market uncertainties related to global and Russia-focused risk-appetite haven't evaporated. With the no change from the CBR widely ...
Signify is faced by difficult market circumstances. Organic growth disappointed in 2018 and we believe that 2019 will be off for a tough start on the back of further macro headwinds. Cost cutting potential will remain the attraction of the case, but we expect incremental savings to be smaller than in the past. As a result, we expect Signify to report more-or-less flat profit and FCF in the coming years, which in our view warrants a reiteration of our Hold rating.
In our view, 2019 has shifted from a visible cash flow-driven story with little reliance on further market yield compression to one in which NAV growth is increasingly reliant on yield compression given the limited scope for near-term margin recovery. Given the 6% discount to reported NAV, we think further downside risk is limited and is only likely in the face of materially negative incremental newsflow from the ADO Group level. That said, we see zero near-term catalysts for the story to regain its previous cache. We downgrade from Buy to Hold while maintaining our €56 target price as the 4Q ...
Japanese CPI misses inflation target again, by miles. Sterling looking slightly stronger as EU hints at some flexibility on Brexit extension. Bond yields ease higher as stocks surge post FOMC.
Italian covered bonds are leading this year's spread tightening in covered bonds but remain on underweight based upon the weak economic backdrop in Italy. Singaporean and Australian covered bonds were upgraded to overweight. Particularly Singaporean covered bonds are overdue tightening retracement. Finnish and Swiss covered bonds are now underweight on tight valuations.
To add to a long list of things considered cornerstones of Economics, which I suspect are well-meaning but misguided, let me propose central bank policies, as rates approach or pass zero. This is of particular note for the Bank of Japan, but the ECB might also want to pay attention
Inflation should stay below-target in February, but from here the trend is more likely to be upwards. But with the Fed hinting at a long pause and a mixed economic backdrop, a Bank of Canada rate hike later this year hangs in the balance
While the Bank of England is clear it'll stay firmly on the sidelines amid the current uncertainty, there are still hints that it could be inclined to hike rates earlier than markets think. As ever, it all depends on Brexit
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