BSP: Governr Remolona Sees Room For 50bp Of Cuts In 2025

• The DMO will kick off issuance for the week this morning with GBP1.0bln nominal of the 30-year 1.25% Nov-54 linker on offer.
• This is the first auction of the 30-year linker that was launch via syndication in March for GBP4.0bln nominal and then tapped twice via syndication since: for GBP4.5bln nominal in July and GBP4.25bln nominal in November.
• Demand at all of the syndications has been strong with books getting bigger in each transaction, from GBP56.4bln to GBP66.0bln.
• There has not been a 30-year linker auction since January 2024 (when the previous 0.125% Mar-51 linker was being reopened 1-2 times per quarter via auction). Those auctions we so long ago we don’t think there is much to infer from them.
• However, looking at 14+ year linker auctions in 2024 we note the lowest bid-to-cover was 3.08x, with the PAOF utilised in each of these auctions since June. This is the only 1.25% Nov-54 linker auction planned for this quarter.
• Timing: Results will be available shortly after the auction window closes at 10:00GMT with a further GBP250mln nominal on offer at the PAOF.

• 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: 5991.72 50-day EMA and a pivot resistance          
• PRICE: 5893.50 @ 07:22 GMT Jan 14 
• 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 the contract traded to a fresh short-term low on Monday. The reversal from the Dec 26 high, confirms the end of the Dec 20 - 26 correction. 5866.00, the Dec 20 low and a key short-term support, has been cleared. 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 5991.72, the 50-day EMA.

•  A red start for the Dollar going into the Europe session, losing a few more pips against the ILS, TWD, ZAR as well as the DXY hovering near its session low.
• Reports that the Trump team is looking for a more gradual approach on Tariffs has favoured some USD unwound, and as such the Greenback sits in the red against all the majors, although the CAD, MXN and the Yen trade closer to flat.
• Early best performer is the Kiwi, up 0.57%, but nothing too impressive if you consider that NZDUSD has fallen a whopping 13.12% since the 30th September and that Friday's and Yesterday's lows were the lowest printed levels since October 2022.
• That short term double low of 0.5542, will be the initial support, while small resistance is seen towards 0.5642 initially.