SPAIN DATA: Expansionary Composite PMI For The Last 15 Months

• MNI: SPAIN JAN MANUF PMI 50.9 (FCST: 53.5); DEC 53.3

• RES 4: 93.87 Low Dec 16 ‘24 
• RES 3: 93.64 61.8% retracement of the Dec 3 - Jan 13 bear leg   
• RES 2: 93.09 High Dec 20
• RES 1: 92.93 High Jan 31               
• PRICE: 92.65 @ 08:01 GMT Feb 3
• SUP 1: 91.52 Low Jan 24                                
• SUP 2: 91.10 Low Jan 20
• SUP 3: 89.68/88.96 Low Jan 15 / 13 and the bear trigger
• SUP 4: 88.87 2.764 proj of the Dec 20 -27 - Jan 2 price swing

Recent gains in Gilt futures continue to highlight a corrective phase and signal scope for a continuation higher near-term. Last week’s high print reinforces current conditions. The contract has traded through the 20-day EMA and the focus is on 93.09, the Dec 20 high. The bear trigger has been defined at 88.96, the Jan 13 low. Initial support is at 91.52, the Jan 24 low.  Medium-term trend conditions remain bearish.

Gilts initially open higher before the recent downtick in Tsys makes itself felt.

• Futures trade as high as 92.84 before easing back to ~92.55.
• Bullish corrective cycle within a longer-term bearish technical trend remains intact.
• Last week’s high was pierced on the open, next meaningful resistance above at the Dec 30 high 93.09.
• Initial support at the Jan 24 low (91.52).
• Yields flat to 2bp higher, curve a touch steeper.
• UK paper happy to maintain higher beta to Tsys than EGBs, given recent trends and perceptions surrounding higher odds of fresh U.S. tariffs being imposed on the EU vs. the UK.
• 10-Year Gilt/Bund spread ~4bp wider at 211.5bp.
• Trump-driven tariff headlines dominate, see previous bullets for greater colour there.
• GBP STIRs roughly in line with levels we flagged ahead of the gilt open.
• Widespread consensus looks for a 25bp cut at this week’s BoE decision, which should leave focus on the forward-looking elements.
• We look for cuts this week and in May.
• Expect our full preview to be released tomorrow