LNG: Croatia Grants Strategic Status to New LNG Infrastructure: Platts

• RES 4: 112-31   High Oct 16 and a key short-term resistance 
• RES 3: 111-26   High Oct 22
• RES 2: 111-12+ 50-day EMA 
• RES 1: 111-11   High Dec 03
• PRICE:‌‌ 111-05 @ 17:16 GMT Dec 4
• SUP 1: 110-01/109-20 Low Nov 25 / Low Nov 20/21     
• SUP 2: 109-02+ Low Nov 15 and the bear trigger  
• SUP 3: 108-28   1.236 proj of the Oct 1 - 14 - 16 price swing     
• SUP 4: 108-12+ 1.382 proj of the Oct 1 - 14 - 16 price swing

A bull cycle in Treasuries remains in play and the contract continues to trade closer to its recent highs. Price has recently breached the 20-day EMA, exposing the 50-day EMA, at 111-12+. This EMA marks the next important resistance, a clear break of it would signal scope for a stronger recovery near-term. For bears, a reversal lower would highlight the end of a corrective cycle and open the bear trigger at 109-02+, the Nov 15 low.    

Bloomberg reports that US President-elect Donald Trump is "poised" to name finance professor Michael Faulkender as Deputy Treasury Secretary. If confirmed, he would serve as number two in the department under Scott Bessent, who is on Capitol Hill today meeting lawmakers. The nomination, if formalised, is consistent with Trump's strategy of selecting experienced operators to run agencies related to his economic and trade agenda. 

• Bloomberg notes that Faulkender, "brings a rare mix of practical experience, advocacy and academic credentials to the position." He served in the Treasury Department during the first Trump administration, "finishing as a Senate-confirmed assistant secretary for economic policy." During that period he oversaw stimulus programmes to alleviate the COVID-19 pandemic but has since been critical of President Joe Biden's additional stimulus, including the American Rescue Plan.
• Faulkender wrote in a WSJ op-ed in March 2023 that, "Stress tests have made the banking system less varied and resilient, particularly to regulatory errors," citing the collapse of Silicon Valley Bank as "a case in point."
• Faulkender concluded: "The solution is to scrap Dodd-Frank’s micromanagement of banks and simply require greater capital levels. That would discourage individual banks from taking on excessive risk without making the entire system fragile."

Cash Gilts and Bunds recovered from an early decline to close slightly weaker Wednesday, as periphery/semi-core spreads tightened.

• Core FI softened early aid stronger equities and oil prices. Italian and Spanish Nov PMIs were slightly on the weak side, while Eurozone PMI was in line.
• A downside miss in the US Services ISM saw a nascent afternoon bounce extend into the cash close, with yields finishing near the lows.
• Yields across both the UK and German curves finished 0.5 to 1.7bps higher, with bellies slightly underperforming overall.
• There were no surprises from ECB President Lagarde in her appearance before the EU Parliament - rate cut pricing receded slightly ahead of next week's decision, with a 25bp reduction still fully priced (50bp implied probability down to 8% from 12% prior). BoE implied traded in a wide range (cumulative cuts through 2025 between 79-88bp).
• Dovish extremes in BoE pricing came after slightly misleading newswire headlines referencing an FT interview with Gov Bailey ("four UK interest rate cuts next year" was not his view but referred instead to market pricing, so nothing new).
• Periphery and semi-core EGB spreads closed tighter alongside a rally in global equities, with 10Y BTP/Bund hitting the tightest levels since 2021. OATs also managed to tighten ahead of the result of the no-confidence vote in the government.
• Thursday brings Eurozone manufacturing/industrial data (Germany, France, Spain); in the UK we get the DMP survey and an appearance by BoE's Greene.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is up 1bps at 1.951%, 5-Yr is up 1.4bps at 1.917%, 10-Yr is up 0.7bps at 2.061%, and 30-Yr is up 1bps at 2.287%.
• UK: The 2-Yr yield is up 1.1bps at 4.236%, 5-Yr is up 1.7bps at 4.112%, 10-Yr is up 0.6bps at 4.249%, and 30-Yr is up 0.7bps at 4.775%.
• Italian BTP spread down 3.5bps at 115.5bps / French OAT down 2.1bps at 83bps