GILTS: Lower With Peers
Feb-06 08:30
Gilt futures tick lower alongside core global FI peers this morning.
- Futures as low as 93.53 after bulls pushed the contract through a couple of resistance levels on Wednesday.
- Initial support and resistance at 92.32/93.85, respectively, with the bullish corrective technical phase intact.
- Yields 0.5-2.0bp higher, curve a touch flatter.
- 10-Year spread to Bunds little changed at ~207bp.
- GBP STIRs hover around levels flagged ahead of the gilt open, ~84bp of cuts priced through year-end, SONIA futures flat to -3.5.
- We outlined our thoughts on the BoE outlook in the early morning UK STIR bullet.
- Our preview of today’s decision is here.
- Today’s decision (12:00 GMT) and Governor Bailey’s press conference (12:30) will be supplemented by the release of the Bank’s Decision Maker Panel data (14:00) and Governor Bailey’s appearance at a private dinner event (no text, invited media only, 21:05).
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Historical bullets
GILTS: Flat Start, Long End Supply Due
Jan-07 08:20
Little net movement in gilts as softer-than-expected French CPI counters earlier selling in Bunds.
- Futures +10 at 92.05,
- Bearish technicals intact in the contract.
- Initial support at the Dec 19 low/bear trigger (91.64), while initial resistance is located at the Jan 2 high (92.88).
- Yields little changed across the curve to start.
- Gilt/Bund 10-Year yield spread flat at 216bp.
- SONIA futures 0.5-1.5bp higher on the day with wider bonds off lows and BoE-dated OIS showing 57bp of cuts through ’25 vs. 56bp early today.
- DMO issuance for calendar ’25 gets underway this morning, via GBP2.25bln of the 4.375% Jul-54 gilt.
BONDS: Bobl/Bund Block trade
Jan-07 08:13
Bobl/Bund block trade suggest a steepener, perfectly weighted.
- RXH5 ~2.35k sold at 132.40.
- OEH5 ~4.95k bought for 117.25.
SILVER TECHS: MA Studies Highlight A Dominant Downtrend
Jan-07 08:09
- RES 4: $34.903 - High Oct 23 and the bull trigger
- RES 3: $33.125 - High Nov 1
- RES 2: $32.338 - High Dec 12 and a key resistance
- RES 1: $30.507 - 50-day EMA
- PRICE: $30.184 @ 08:07 GMT Jan 7
- SUP 1: $28.748 - Low Dec 19
- SUP 2: $28.446 - 76.4% retracement of the Aug 8 - Oct 23 bull cycle
- SUP 3: $27.686 - Low Sep 6
- SUP 4: $26.451 - Low Aug 8
A bear cycle in Silver that started Oct 23 remains in play - for now - and recent gains are considered corrective. The metal has recently breached support at $29.642, the Nov 28 low. The break lower opens $28.446, a Fibonacci retracement. Note that moving average studies are in a bear-mode position highlighting a dominant downtrend. Key resistance has been defined at $32.338, the Dec 12 high. A break of this level would signal a reversal.
