GILT TECHS: (H5) Bullish Corrective Phase Intact

• RES 4: 93.87 Low Dec 16  
• RES 3: 93.64 High Dec 17  
• RES 2: 93.16 20-day EMA 
• RES 1: 92.08 High Jan 2              
• PRICE: 92.23 @ Close Jan 3 
• SUP 1: 91.64 Low Dec 19 and the bear trigger                         
• SUP 2: 91.58 4.382 proj of the Dec 3 - 4 - 5 minor price swing
• SUP 3: 91.45 4.500 proj of the Dec 3 - 4 - 5 minor price swing
• SUP 4: 91.33 4.618 proj of the Dec 3 - 4 - 5 minor price swing

The trend condition in Gilt futures is unchanged, it remains bearish and short-term gains are considered corrective - for now. The recent breach of 91.87, the Dec 19 low, confirmed a resumption of the downtrend. Sights are on 91.58 next, a 4.382 projection of the Dec 3 - 4 - 5 minor price swing. Initial resistance is at 92.08, the Jan 2 high. Resistance at the 20-day EMA, is at 93.16, and the average is seen as an important hurdle for bulls.

• Belgium: We look for the 10-year syndication to be held in the week ahead (with the potential for it to be held in the W/C 13 January). We look for the same E7.0bln size we have seen in the past two years with some upside risk.
• Ireland: There is one Irish syndication due in 2025 and given that there is already a May-35 IGB outstanding (that was originally issued as a 15-year bond), we see around a 50% probability that this year's new issue is not a 10-year with 15-year and 30-year both possibilities. We expect the transaction to take place in the week ahead and pencil in a E3bln size.
• Italy: We pencil in a new 15-year BTP in the week ahead for E10bln. The maturity in our view is quite uncertain and there is also a potential for a new 30-year BTPei.
• Portugal: We expect a syndication in the week ahead (possibly the following week) and there is a possibility for a 10-year but this may not be launched in January as the current 10-year benchmark, the 2.875% Oct-34 OT, is still smaller than other comparable duration OTs. There is also an existing Oct-35 OT that was launched as a 15-year issue in 2020. We therefore think it most likely that we see a new 2033 or 2040 OT launched.
• Slovenia: We don’t have a strong conviction regarding the maturity, but we expect a Slovenian syndication in the upcoming week.

For more on our wider syndication expectations and expectations for new bonds in 2025 see the MNI Eurozone Issuance Deep Dive: 2025 Outlook here.

• RES 4: 5040.00 High Dec 9 and a key short-term resistance 
• RES 3: 5027.00 High Dec 13      
• RES 2: 5002.00 High Dec 18 
• RES 1: 4942.00 High Jan 2          
• PRICE: 4917.00 @ 06:33 GMT Jan 6  
• SUP 1: 4829.00 Low Dec 20 and key short-term support       
• SUP 2: 4800.87 76.4% retracement of the Nov 21 - Dec 9 bull cycle      
• SUP 3: 4775.00 Low Nov 29  
• SUP 4: 4727.00 Low Nov 21 and a key support  

A bull cycle in the Eurostoxx 50 futures contract remains intact. However, the recent move down continues to highlight a corrective phase and despite the latest bounce, a short-term bear threat remains present - for now. Key short-term support has been defined at 4829.00, the Dec 20 low. A break of it would confirm a resumption of the bear cycle and open 4800.87, a Fibonacci retracement. Initial firm resistance to watch is at 4942.00, the Jan 2 high.