UK DATA: Construction PMI in line with consensus, but still a concern
UK construction PMI picked up a little above last month's low and came in broadly in line with consensus at 46.4 (consensus 46.3, February 44.6). However the details are still disappointing. The press release notes that there is the "lowest business optimism since October 2023", civil engineering contracted at the fastest pace since October 2020 while residential construction contracted further, but at a slower pace than in February (44.7 from 39.3 in Feb).
"Latest survey data indicated a reduction in staffing numbers for the third consecutive month. The rate of job shedding was the steepest since October 2020. Subcontractor usage also decreased at a solid pace in March, while construction companies reported further cutbacks to their input buying in response to lower workloads."
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BUND TECHS: (M5) Key Support Remains Exposed
- RES 4: 132.80 High May 5 and a key resistance
- RES 3: 132.56 High Feb 28 and a key resistance
- RES 2: 131.95 High Mar 4
- RES 1: 130.40/130.88 Low Feb 19 / Low Mar 3
- PRICE: 129.75 @ 05:53 GMT Mar 5
- SUP 1: 128.77 Intraday low
- SUP 2: 128.68 1.618 proj of the Feb 5 - 19 - 28 price swing
- SUP 3: 128.33 1.764 proj of the Feb 5 - 19 - 28 price swing
- SUP 4: 128.00 Round number support
Bund futures have gapped sharply lower today and price action is likely to remain volatile. The contract has pierced a key support at 129.41, the Feb 14 low. A clear break of this level would confirm a resumption of the downtrend and pave the way for a move towards 128.68, a Fibonacci projection. Moving average studies on the continuation chart are in a bear-mode position, highlighting a dominant downtrend. Resistance is at 130.40, the Feb 19 low.
US TSY OPTIONS: TY Upside Structure Trades
Latest block trade lodged at 07:56:12 London/02:56:12 NY:
- 20K TYJ5 112.50 calls vs. 30K TYJ5 109.75 puts, structure trades at 0-11, looks like a seller of the puts & buyer of the calls.
- Covered via selling 11.5K TYM5 at 110-31+.
EGB SYNDICATION: German 30-year syndication: Books open
- Guidance: 2.50% Aug-54 Bund (DE000BU2D004) MID +4bp area
- Size: EUR benchmark (MNI had expected E6bln similar to last year, but very uncertain given market conditions and could be as small as E3-4bln).
- Maturity: 15 August 2056
- Coupon: Long first
- Settlement: 12 March 2025 (T+5)
- ISIN: DE000BU2D012
- Timing: Books open / today's business
- Bookrunners: Barclays / BofA / Commerzbank / Deutsche Bank / Morgan Stanley (DM/B&D)/ NatWest
From market source
