CREDIT SUPPLY: PPG (PPG A3/BBB+/BBB+): Guidance

• On the commodity front, a bull cycle in Gold remains in play and the recent breach of resistance at 2726.2, the Dec 12 high, reinforces current conditions. Sights are on $2790.1, the Oct 31 all-time high. A break of this hurdle would confirm a resumption of the primary uptrend. On the downside, the first key support to watch is $2668.8, the 50-day EMA. A reversal lower and a breach of this average would reinstate a bearish threat. The 20-day EMA is at $2698.2.
• In the oil space, the trend structure in WTI futures is bullish despite the recent pullback. The move down appears corrective and is allowing an overbought trend reading to unwind. The 20-day EMA, at $74.28, has been pierced. A clear break of it would signal scope for a deeper retracement and expose the 50-day EMA, at $72.11. A reversal higher would highlight the end of the correction and refocus attention on $79.48, the Apr 12 ‘24 high and a key resistance.

• Treasuries display all the hallmarks of a sizeable risk-off move in the US tech sell-off prompted by the success of China’s DeepSeek, with only a modest paring of gains so far as US desks filter in.
• Cash yields are 8.5-12bp lower from Friday’s close, with declines led by 7s.
• TYH5 trades at 109-08+ (+ 26+) off a recent high of 109-12 on extremely strong volumes of 885k.
• It’s a bullish short-term cycle with the earlier high having tested the 50-day EMA at 109-12+ after which lies 109-31 (Dec 18 high). A clear break is required here to strengthen a bullish theme.
• The medium-term trend remains lower however, with support at 108-00 (Jan 16 low).
• Today’s docket is headlined by double coupon issuance with both 2s and 5s. Last month’s auctions saw 2s on the screws whilst 5s stopped through (just, by 0.2bp) for a second consecutive month. Indirect takes increased for both, with a particularly notable climb for 2s.
• Data: Chicago Fed national account Dec (0830ET), New home sales Dec (1000ET), Dallas Fed mfg (1030ET)
• Coupon issuance: US Tsy $69B 2Y note 91282CMH1 (1130ET), US Tsy $72B 5Y note - 91282CMG3 (1300ET)
• Bill issuance: US Tsy $72B 26W bill auctions (1130ET), $84B 13W bill auctions (1300ET)
• Looking ahead to Wednesday's FOMC decision, see the MNI Fed Preview here, with the analyst addendum to follow today. 

OEH5 117/116.75ps, sold at 11 in 13k.