MNI: INVITATION REMINDER: MNI Webcast with ECB's Philip Lane On Dec 18

Marginal underperformance for the front end/belly as we head into the auction that will introduce the new long 3-year 4.375% Mar-28 gilt.

• Front end yields in the UK 0.5bp higher vs. a very modest rally further out the curve, although that could also be driven by moves seen on wider core global FI curves.
• A reminder that the DMO will look to sell GBP4.0bln of the line and it will replace the 3.75% Mar-27 gilt as the on-the-run issue.
• All 8 offerings of the 3.75% Mar-27 gilt saw auction sizes of GBP3.75-4.00bln, bid-to-covers in excess of 3.00x (ranging from 3.01-3.68bp, 3.29x mean), although tails were bit more variable, ranging from 0.3-0.6bp (0.6bp last).
• We expect similarly strong demand at the launch today but are again wary of a relatively wide tail.
• Auction window closes at 10:00 London.

A bearish theme in WTI futures remains intact and the move lower from the Nov 7 high, reinforces current conditions. An extension lower would expose $65.99, the Oct 1 low, and $64.16, the Sep 10 low and key support. For bulls, a clear reversal to the upside would instead refocus attention on the key short-term resistance at $77.70, the Oct 8 high. Clearance of this level would resume the recent uptrend. Initial resistance is $72.88, the Nov 7 high. The trend condition in Gold is unchanged, it remains bullish and the latest pullback appears corrective. However, recent weakness has resulted in a breach of the 20-day EMA, and Tuesday’s sell-off delivered a print below the 50-day EMA, at $2644.4. The breach signals scope for a deeper retracement towards $2547.0 the Sep 18 low. Firm resistance is seen at $2689.5, the 20-day EMA. Clearance of this average is required to signal a reversal.

• WTI Crude up $0.64 or +0.94% at $68.75
• Natural Gas down $0.02 or -0.69% at $2.887
• Gold spot up $11.63 or +0.45% at $2609.67
• Copper up $0.9 or +0.22% at $414.65
• Silver up $0.24 or +0.79% at $30.9628
• Platinum up $1.15 or +0.12% at $950.18

A bearish condition in Eurostoxx 50 futures remains intact and Tuesday’s extension down reinforces current conditions. The sell-off confirms a resumption of the downtrend that started Sep 30. Price has breached 4746.94, the 61.8% retracement of the Aug 5 - Sep 30 bull cycle. This exposes 4662.12, the 76.4% retracement point. Initial firm resistance has been defined at 4961.00, Nov high, where a break would highlight a reversal. The trend condition in S&P E-Minis remains bullish and the contract is holding on to the bulk of its recent gains. A key short-term support has been defined at 5724.25, the Nov 4 low. The latest rally resulted in a breach of the bull trigger at 5927.25, Oct 17 high, confirming a resumption of the primary uptrend. The 6000.0 psychological handle has been pierced. Sights are on 6070.16, a Fibonacci projection. Initial support is at 5927.25, the Oct 17 high.

• Japan's NIKKEI closed lower by 654.43 pts or -1.66% at 38721.66 and the TOPIX ended 33.1 pts lower or -1.21% at 2708.42.
• Elsewhere, in China the SHANGHAI closed higher by 17.308 pts or +0.51% at 3439.278 and the HANG SENG ended 23.43 pts lower or -0.12% at 19823.45.
• Across Europe, Germany's DAX trades higher by 75.98 pts or +0.4% at 19108.7, FTSE 100 higher by 20.39 pts or +0.25% at 8046.02, CAC 40 up 20.08 pts or +0.28% at 7247.06 and Euro Stoxx 50 up 10.94 pts or +0.23% at 4755.63.
• Dow Jones mini down 85 pts or -0.19% at 43990, S&P 500 mini down 4.75 pts or -0.08% at 6008.25, NASDAQ mini down 14.25 pts or -0.07% at 21175.25.