FINANCIALS: Mitsubishi HC UK - New Issue

Riksbank Governor Thedeen pushed back on the proposal for more relaxed macroprudential policies in the housing market, stating that “just making it easier to borrow will not solve long-term housing market challenges”.

• The Inquiry, which was presented in November 2024, proposed a relaxation of amortisation requirements for households, an increase in the mortgage cap to 90% (from 85% currently) and a new debt-to-income cap of 550%.
• Thedeen believes “households are more resilient with amortisation requirements and mortgage caps than they would have been without them, and relaxing credit rules too much risks reversing this trend”.
• He notes that “there is a risk that the Inquiry's proposals could push up housing prices, increase household debt and make households more vulnerable to shocks.”
• Pushback against the Inquiry’s proposals was also seen in the Riksbank’s H2 ‘24 Financial Stability Report, and a recent speech by Deputy Governor Bunge.
• The Riksbank will provide a full assessment of the matter after the Government submits a proposal for consultation regarding the Inquiry’s proposals (expected in the Spring).

• 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: $30.974 - HIgh Jan 16                              
• PRICE: $30.490 @ 08:19 GMT Jan 21  
• SUP 1: $29.509/28.748 - Low Jan 13 / Low Dec 19 and bear trigger        
• 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 appear corrective. However, the metal traded higher last week suggesting scope for a continuation near-term. An extension would expose key resistance at $32.338, the Dec 12 high. Clearance of this level would signal a reversal. On the downside, support to watch is $29.509, the Jan 13 low, and $29.748, the Dec 19 low and the bear trigger.

The DMO has released the minutes of yesterday's consultations with gilt market participants. The findings surrounding issuance preferences are outlined below:

• There was GEMM support for "a reduction in the duration of conventional gilt issuance in 2025-26 relative to the current year [...] some attendees cited declining structural demand for gilts from the UK pension sector as a factor in their recommendation to reduce long issuance."
• "Mixed views were expressed about the number and sizes of syndications that could be scheduled in 2025-26, although most participants were supportive of their continued use next year. There were also isolated calls for auctions to be scheduled less frequently but in larger sizes than in 2024-25."
• "A number of attendees suggested that the proportion of index-linked gilt issuance could again be set at a reduced level in 2025-26 relative to previous years"
• "Attendees noted the importance of maintaining some flexibility in the delivery of the remit [...] calls for more regular use of gilt tenders as a means to deliver financing in response to demand and market conditions."
• "Continued issuance of green gilts next year was supported by attendees"
• "Some participants recommended that the average sizes of gilt auctions could be increased in 2025-26 relative to the current year, with a few suggestions that individual gilt lines could also be built to larger sizes."
• "A number of attendees suggested that issuance of Treasury bills should make a positive net contribution to financing in 2025-26"
• "The DMO's financing remit for 2025-26 will be published alongside the Spring forecast on 26 March 2025, following an updated OBR EFO"