BOE: Pill is "cautious" regarding future rate cuts; we don't learn a lot more

• RES 4: 92.88 High Jan 2 
• RES 3: 91.86 20-day EMA 
• RES 2: 91.58 High Jan 8 
• RES 1: 90.31 High Jan 9              
• PRICE: 89.30 @ Close Jan 13
• SUP 1: 88.96 Low Jan 13                             
• SUP 2: 88.87 2.764 proj of the Dec 20 -27 - Jan 2 price swing  
• SUP 3: 88.53 3.000 proj of the Dec 20 -27 - Jan 2 price swing
• SUP 4: 88.19 3.236 proj of the Dec 20 -27 - Jan 2 price swing

The trend condition in Gilt futures is unchanged, it remains bearish and last week’s fresh cycle lows reinforce current conditions. The latest move down also highlights an acceleration of the trend. Sights are on 88.87 next, a Fibonacci projection. Initial resistance is at 90.31, last Thursday’s intraday high. Resistance at the 20-day EMA, is at 91.86. The EMA is seen as an important hurdle for bulls.

• RES 4: 160.00 Round number resistance   
• RES 3: 159.45 High Jul 12
• RES 2: 159.26 0.618 proj of the Sep 16 - Nov 15 - Dec 3 price swing  
• RES 1: 158.87 High Jan 10  
• PRICE: 157.61 @ 06:49 GMT Jan 14
• SUP 1: 156.78/02 20-day EMA / Low Dec 31
• SUP 2: 154.71 50-day EMA  
• SUP 3: 154.44 Low Dec 19
• SUP 4: 153.16 Low Dec 17  

The trend condition in USDJPY is unchanged, it remains bullish and the pair is holding on to the bulk of its recent gains. Last week’s fresh cycle high, reinforces the bullish theme. The recent breach of 156.75, the Nov 15 high, confirmed a resumption of the uptrend and opens 159.45, the Jul 12 high. Moving average studies are in a bull-mode position highlighting a dominant uptrend. Initial firm support is 156.78, the 20-day EMA.

The EU and Greece are scheduled to hold syndications and the Netherlands, Germany and Spain still look to hold auctions this week. We also pencil in syndications from Austria, Ireland and France while Italy has already held an auction this week. We pencil in estimated gross issuance for the week at E49.6bln, down from E62.5bln last week.

• The EU on Monday announced a dual tranche mandate for a new long 3-year benchmark maturing 4 July 2028 and tap of the 3.375% Oct-54 bond (ISIN: EU000A3K4EY2). The transaction will take place on Tuesday.
  • The new 3-year maturing 4 July 2028 was one of the three issues highlighted as likely to launch in H1. We pencil in a tranche size of E5-7bln (we have not seen an EU-bond tranche larger than that since March 2022 - but there is a possibility we go a bit higher with the large H1 EU funding plan).
  • The 3.375% Oct-54 tap we pencil in between E4-6bln (possibly partly depending upon the size of the new 3-year).
  • We look for a combined E9-13bln total transaction size.
• Greece on Monday announced a mandate for a new 10-year EUR benchmark maturing 15 June 2035.
  • We had expected a 10-year GGB - but had thought next week to be more likely than this week (given the GGB auction previously scheduled on Wednesday, which has now been cancelled).
  • We pencil in a E3-4bln size today.
• Today, the Netherlands will sell E1.5-2.0bln of the on-the-run 30-year 2.00% Jan-54 DSL (ISIN: NL00150012X2).
• Also today, Germany will issue E5bln of the new 2.40% Apr-30 Bobl (ISIN: DE000BU25042).

For more details on issuance this week and next week see the full document here: EZ250114.pdf