SONIA: Call spread buyer

• RES 4: 5970.87 61.8% retracement of the Feb 19 - Mar 13 bear leg  
• RES 3: 5924.59 50-day EMA  
• RES 2: 5864.25 Low Jan 13 and a recent breakout level
• RES 1: 5834.00 Intraday high                    
• PRICE: 5819.25 @ 13:48 GMT Mar 25  
• SUP 1: 5650.75/5559.75 Low Mar 18 / 13 and the bear trigger                  
• SUP 2: 5483.50 2.00 proj of the Dec 6 ‘24 - Jan 13 - Feb 19 swing 
• SUP 3: 5396.00 2.236 proj of the Dec 6 ‘24 - Jan 13 - Feb 19 swing
• SUP 4: 5341.87 2.382 proj of the Dec 6 ‘24 - Jan 13 - Feb 19 swing          

The trend condition in S&P E-Minis is bearish and the latest recovery appears corrective. MA studies are unchanged - they remain in a bear-mode set-up, highlighting a dominant downtrend. However, this week’s gains have resulted in a breach of the 20-day EMA, at 5803.08. This signals scope for a continuation higher near-term - towards 5864.25, the Jan 13 low. A reversal lower would refocus attention on 5559.75, the Mar 13 low and bear trigger.

• SocGen believe that GBP positioning sits uncomfortably with the parlous state of the UK’s public finances. They state there’s a good case for being long EUR/GBP here, regardless of yesterday’s stronger PMI data, and remain bearish GBP vs. the Scandies.
• ING have noted the gilt market will be on the lookout for any missteps in the very tight room for fiscal manoeuvring, and the bar for a negative reaction either in bonds or a meaningful repricing lower in growth expectations both have the potential of hitting sterling. They see upside risks to EUR/GBP extending beyond the recent 0.845 highs this week.
• BBVA have said that with a challenging domestic environment and subdued growth outlook, they believe sterling will weaken for the rest of the year, particularly against EUR.
• JP Morgan’s technical team stated that GBPUSD’s decelerating rally triggered a cluster of their pattern-base sell signals, which increase the probability for a near-term pullback within the developing bull trend. JPM believe that EURGBP is about fair; however, there is room to overshoot fair value if fiscal concerns intensify. Notably, they have entered a EUR/GBP & EUR/CHF topside dual digital.
• Separately, Rabobank say EUR’s recent loss of momentum has allowed EUR/GBP to edge lower towards its average level of the past 6-month. Rabo see scope for the EUR to give back some more of its recent gains in Q2 and they retain their forecast of EUR/GBP0.83 on a 3-month view.

• Reoffer: 88.630 / 1.676%
• Spread set earlier: 1.80% OATei RY +10bps (Guidance was + 12bps area)
• Hedge ratio: 76% vs 1.80% OATei. Ref: 103.031 / 1.576%
• Size: E3bln (MNI expected E3-4bln)
• Books closed in excess of E45bln (inc E3bln JLM interest)
• Settlement: 1 April 2025 (T+5)
• ISIN: FR001400QCA1
• Bookrunners: BNPP / CITI(B&D and DM) / CACIB / JPM / MS / SG
• Timing: TOE 13:39GMT / 14:39CET. FTT immediately