USD: Finding some early selling interest on the Risk On tone
Feb-14 07:34
- Looking at the Dollar against G10 overnight and into the European Govie Cash open, the Greenback was mostly flat, at one end the NZD was up just a 0.19%, and the other, the CHF was down 0.13%.
- Post the European Open and given the Risk On tone, Hermes beat expectations, the Dollar is seeing some broader offers, GBP, EUR, SEK, ZAR, CZK, IDR, PLN, NZD, AUD, EUR are all near or testing their session highs.
- We noted Yesterday a move down towards the 50% retracement level in the USDSEK, the cross is now just 4 big figures short of that level.
(Chart source: MNI/Bloomberg).
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GILT AUCTION PREVIEW: 4.25% Jul-34 gilt
Jan-15 07:29
- The DMO will return to the market this morning with GBP4.00bln of the 10-year 4.25% Jul-34 gilt on offer.
- The GBP4.00bln nominal size is a bit larger than the other GBP3.75bln auctions of this gilt since its launch.
- We have seen reasonably wide tails for this gilt which have ranged from 0.8-1.3bp and averaged over 1.0bp (when excluding the launch auction).
- Given the recent volatility and slightly larger auction size there is scope for another relatively wide tail at today’s auction. Given recent moves this has a higher-than-usual potential to spook the market.
- However, demand may be boosted a little as this is the last auction of the 4.25% Jul-34 gilt ahead of the syndicated launch of a new 10-year gilt in February (we pencil in 11 February) – that new gilt will be reopened via auction on 12 March via auction.
- Timing: Results will be available shortly after the auction window closes at 10:00GMT with a further GBP1.0bln available to successful bidders through the PAOF.
EQUITY TECHS: E-MINI S&P: (H5) Bear Threat RemainsPresent
Jan-15 07:29
- RES 4: 6178.75 High Dec 6 and key resistance
- RES 3: 6163.75 High Dec 16
- RES 2: 6068.25/6107.50 High Jan 6 / High Dec 26
- RES 1: 5987.43 50-day EMA and a pivot resistance
- PRICE: 5866.50 @ 07:18 GMT Jan 15
- SUP 1: 5809.00 Low Jan 13
- SUP 2: 5784.00 Low Nov 4
- SUP 3: 5698.25 50.0% retracement of the Aug 5 - Dec 6 bull leg
- SUP 4: 5658.00 Low Sep 12 ‘24
A bear threat in the S&P E-Minis contract remains present and short-term gains are considered corrective - for now. The reversal from the Dec 26 high, confirmed the end of the Dec 20 - 26 correction. 5866.00, the Dec 20 low and a key short-term support, has been breached. This strengthens a bearish theme and sights are on 5784.00, the Nov 4 low and an important short-term support. Initial pivot resistance is seen at 5987.43, the 50-day EMA.
BUNDS: Off the low Post UK CPI, a Busy day ahead
Jan-15 07:23
- It was a very tight range for Bund overnight, but this was quickly broken after the UK CPI came below expectation, helping the contract jump 19 ticks to test a new intraday high.
- Regardless of the early price action, the contract remains under serious pressure, after having lost 690 ticks from the 2nd of December high to Yesterday's low. a one way price action.
- The German 10yr yield has cleared the July high Yesterday, and should again be quoted close to that level, equated to 130.47 Yesterday.
- Investors will now be staring at the 2024 high printed in late May at 2.706%, this equated to 129.89 Yesterday.
- Resistance will be at Yesterday's high of 131.09 initially.
- Today sees, France, Spain Final CPIs, and of course the US CPI.
- SUPPLY: UK £4bn 10yr (equates to 30.5k Gilt) should weigh into the bidding deadline, Germany 2053, 2054 (equates combined to 17.6k Buxl) could weigh.
- SPEAKERS: ECB Lane, Guindos, Villeroy, Vujcic, Fed Kaskari, Williams, Goolsbee, BoE Taylor.
