UK DATA: Construction PMI due at 9:30BST

{GB} GILTS: Gilts follow peers lower.

• Futures as low as 92.12, before trading back to 92.25, still ~130 ticks lower on the day.
• Key short-term support at 91.79, the Feb 20 low
• Yields 8-11bp higher, curve steeper as increasing global debt supply is priced in.
• Last night’s tabled German fiscal reform (much larger and expedited vs. expectations) and signs that Trump may moderate tariffs against Mexico & Canada drive the early sell off.
• Notable tightening vs. Bunds across EGBs, Tsys & gilts underscores that German fiscal headlines are the main driver of the move, although Bunds have edged away from session lows in recent trade.
• 10-Year gilt/Bund spread on track for the lowest close since late October, last ~8bp tighter at 196.5bp, trading comfortably below the psychological 200bp mark.
• Immediate support in the spread at the Oct 30 closing level (196.4bp).
• In local news, BBC sources have suggested that “the Treasury has earmarked several billion pounds in draft spending cuts to welfare and other government departments ahead of the Spring Statement.” Macro impulses dominate.

• MNI: SPAIN FEB SERVICES PMI 56.2 (FCST: 55.5); JAN 54.9
• SPAIN FEB COMPOSITIE PMI 55.1 (FCST: 54.8); JAN 54.0

• RES 4: $3000.0 - Psychological round number   
• RES 3: $2972.0 - 2.0% 10-dma envelope
• RES 2: $2962.2 - 2.00 proj of the Nov 14 - Dec 12 - 19 price swing
• RES 1: $2930.1/2956.2 - High Feb 26 / 24 and the bull trigger 
• PRICE: $2918.5 @ 08:09 GMT Mar 5 
• SUP 1: $2884.5/2832.7 - 20-day EMA / Low Feb 28  
• SUP 2: $2812.4 - 50-day EMA
• SUP 3: $2758.3 - Low Jan 30
• SUP 4: $2730.6 - Low Jan 27 

The recent pullback in Gold appears to be a correction. The move through the 20-day EMA does signal scope for an extension towards the next important support around the 50-day EMA, at $2812.4. However, this week’s gains are a positive development and potentially an early reversal signal. A stronger rally would refocus attention on the next objective at $2962.2, a Fibonacci projection. This would also open the $3000.0 handle.