OPTIONS: Expiries for Feb26 NY cut 1000ET (Source DTCC)

• A broader bid goes through for the Yen, testing an intraday high versus the EUR, USD, AUD and GBP, the US Tnotes has broken above 109.00, helping Yields lower.
• Next immediate support in USDJPY comes at 155.15/154.97 50-day EMA / Trendline drawn from Sep 16 low, but note that it traded as low as 154.78 last Week.

Gilts rally on the back of the broader risk-off price action flagged elsewhere.

• Futures as high as 92.43 before fading back to ~92.30.
• Zooming out the bearish technical structure remains intact in the contract
• Initial resistance located at last week’s high (92.52), which protects a Fibonacci level (92.75).
• Yields 3-4bp lower across the curve, flattening seen.
• 2s and 5s threaten a clean break of last week’s yield lows before a slight pullback, while last week’s lows further out the curve are unchallenged.
• 2s10s ~2.5bp below ’25 closing highs, 5s30s ~1.5bp below their own ’25 closing high.
• J.P.Morgan recommended 30s/50s steepeners late on Friday
• Little of note on the UK data calendar this week, with the scheduled BoE speak also set to provide little interest for markets, focusing on areas outside of pure monetary policy.
• This week’s supply is set to come in the form of GBP1.5bln 1.125% Sep-35 I/L (Tuesday) and GBP3bln 0.875% Jul-33 green gilt (Wednesday).
• The DMO may also tender a gilt with less than 5 years until maturity on Thursday and is consulting with market participants on the matter at present.
• Elsewhere, the BoE will come to market with GBP550bln of APF sales from the long maturity bucket later today.

MONTH END EXTENSION: Looking at the UK, this looks to be a record Extension for the Month of January at least for Bloomberg (Used to be Barclays).

Bloomberg Bonds projected:

• US Tsys: +0.07yr (small, average).
• EU Govies: +0.10yr (decent).
• UK Govies: +0.23yr (HUGE).