GREECE T-BILL AUCTION PREVIEW: On offer next week

This morning, Germany will hold its second 15-year Bund auction of the year. On offer will be E500mln of the 0% May-36 Bund (ISIN: DE0001102549) and E1.5bln of the 1.00% May-38 Bund (ISIN: DE0001102598).

• The size is a consistent with recent Bund auctions in the 15-year segment.
• Recent auctions in the German 15y segment have passed smoothly, with solid bid-to-covers (in a 1.61x to 5.49x range since July), bid-to-offers (1.29x to 4.81x range since July) and the low prices above the secondary market mid-prices throughout 2024.
• For the last 0% May-36 Bund auction on 9 October, the bid-to-cover stood at 4.87x, while the bid-to-offer came in at 3.98x. For the last 1.00% May-38 Bund auction on 4 September, the bid-to-cover stood at 5.49x, while the bid-to-offer came in at 4.81x.
• Bund positioning currently appears short, see our Europe Positioning Indicator here.
• The fiscal situation in Germany is characterized by some uncertainty at the moment after Sunday's snap elections were followed by talks of passing a bill on increased military spending using the outgoing parliament. This prompted some Bund weakness earlier this week - which was pared in the meantime, however. For a round-up of analyst views on the German election, see here.
• The next 15y Bund auction will be on 26 March, while further openings of both Bunds on offer are not scheduled yet.
• Note that we are also expecting a German 30-year Bund syndication at some point. The timing is uncertain following the German election.
• Timing: Results will be available shortly after the bidding window closes at 10:30GMT / 11:30CET.

A bearish theme in WTI futures remains intact and Tuesday’s sell-off reinforces current conditions. The move lower has resulted in a clear breach of support at $70.20, the Feb 6 low. This confirms a resumption of the downtrend that started on Jan 15 and paves the way for an extension towards $67.75, the Dec 20 ‘24 low. Key short-term resistance has been defined at $74.06, Feb 3 high. Despite Tuesday’s pullback, a bull cycle in Gold remains in play. Recent fresh cycle highs once again confirm a resumption of the uptrend and maintain the bullish price sequence of higher highs and higher lows. Moving average studies are in a bull mode position too, highlighting a dominant uptrend and positive market sentiment. Sights are on the $2962.2, a Fibonacci projection. The first key support to watch is $2879.0, the 20-day EMA.

• WTI Crude up $0.3 or +0.44% at $69.24
• Natural Gas down $0.02 or -0.46% at $4.137
• Gold spot down $0.68 or -0.02% at $2913.89
• Copper up $17.3 or +3.82% at $470.75
• Silver up $0.05 or +0.15% at $31.7699
• Platinum up $3.9 or +0.4% at $974.32

The trend needle in the Eurostoxx 50 futures contract continues to point north and short-term weakness is considered corrective. Note too that moving average studies are in a bull-mode set-up, highlighting a dominant uptrend and positive market sentiment. Sights are on 5574.57 next, a Fibonacci projection. Initial firm support to watch is 5393.82, the 20-day EMA. A clear break of the EMA would signal scope for a deeper retracement. The move down this week in S&P E-Minis. appears corrective, however, price has breached support at 6014.00, the Feb 10 low. This exposed a key support at 5935.50, the Feb 3 low, that was pierced yesterday, a clear break would allow for a deeper retracement.  MA studies remain in a bull-mode condition that suggests the trend direction remains up. A resumption of gains would refocus attention on key resistance at 6178.75, the Dec 6 ‘24 high.

• Japan's NIKKEI closed lower by 95.42 pts or -0.25% at 38142.37 and the TOPIX ended 8.3 pts lower or -0.3% at 2716.4.
• Elsewhere, in China the SHANGHAI closed higher by 34.174 pts or +1.02% at 3380.214 and the HANG SENG ended 753.91 pts higher or +3.27% at 23787.93.
• Across Europe, Germany's DAX trades higher by 254.11 pts or +1.13% at 22669.35, FTSE 100 higher by 55.89 pts or +0.64% at 8730.86, CAC 40 up 77.96 pts or +0.97% at 8126.81 and Euro Stoxx 50 up 54.89 pts or +1.01% at 5502.5.
• Dow Jones mini up 100 pts or +0.23% at 43803, S&P 500 mini up 27.5 pts or +0.46% at 5999.25, NASDAQ mini up 155.5 pts or +0.74% at 21313.25.