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BUND TECHS: (H5) Clears Key Support
- RES 4: 137.75 Low Dec 10
- RES 3: 135.15 High Dec 13
- RES 2: 133.90 20-day EMA
- RES 1: 132.57/133.48 High Jan 6 / 3
- PRICE: 131.55 12:27 GMT Jan 8
- SUP 1: 131.50 Intraday low
- SUP 2 131.28 Low Nov 14 ‘24 (cont)
- SUP 3: 131.00 Round number support
- SUP 4: 130.58 Low Nov 6 ‘24 and a key support
The trend cycle in Bund futures remains bearish and this week’s extension reinforces this theme. The contract has breached key support at 132.00, the Nov 6 low. A clear break of this level strengthens a bearish theme. Sights are on a move towards 131.28 next, the Nov 14 low on the continuation chart. Initial resistance is at 132.57, the Jan 6 high. Key short-term resistance is at 133.90, the 20-day EMA.
STIR: Less Than 50bp Of BoE Cuts Priced For '25
{GB} STIR: Long end weakness, fiscal worry and the latest round of media speculation surrounding Trump’s tariff preferences promote hawkish repricing for GBP STIRs.
- BoE-dated OIS now prices ~46bp of cuts through ’25, testing the recent hawkish extreme.
- The next 25bp cut is still more than fully discounted through the May MPC.
- SONIA futures -0.5 to -15.0, with the strip steepening.
- SFIZ5 pierces its December low, with bears now eying the ’24 low (95.660), which is ~10.0 below prevailing levels.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
Feb-25 | 4.541 | -15.9 |
Mar-25 | 4.511 | -18.9 |
May-25 | 4.413 | -28.7 |
Jun-25 | 4.393 | -30.7 |
Aug-25 | 4.324 | -37.6 |
Sep-25 | 4.303 | -39.7 |
Nov-25 | 4.258 | -44.2 |
Dec-25 | 4.238 | -46.2 |
OUTLOOK: Price Signal Summary - Downtrend In Gilts Accelerates
- In the FI space, the trend cycle in Bund futures remains bearish and this week’s extension reinforces this theme. The contract has breached key support at 132.00, the Nov 6 low. A clear break of this level strengthens a bearish theme. Sights are on a move towards 131.28 next, the Nov 14 low on the continuation chart. Initial resistance is at 132.57, the Jan 6 high. Key short-term resistance is at 133.90, the 20-day EMA.
- The trend condition in Gilt futures is unchanged, it remains bearish and this week’s fresh cycle lows reinforces current conditions. Today’s sell-off highlights an acceleration of the trend and maintains the price sequence of lower lows and lower highs. Sights are on the 90.00 psychological handle. Initial resistance is at 91.58, today’s intraday high. Resistance at the 20-day EMA, is at 92.88, and the average is seen as an important hurdle for bulls.
