GILTS: Rally Extends
Gilts through yesterday’s highs as the tariff-driven risk-off move extends further.
- Futures trade as high as 94.06.
- Key resistance at the Mar 4 high (93.79) has been broken, next upside target of note comes in at the Feb 6 high on a continuation chart (94.35).
- Yields 7.5-10.0bp lower, curve bull steepening extends further, aided by the dovish repricing in STIRs.
- 2s near 3.90%, printing the lowest level seen since mid-September, next yield support of note comes in at the September closing lows, which are more than 10bp below prevailing levels.
- 10s are on track for the lowest close of the year, last ~4.42%.
- Dovish repricing in GBP STIRs extends further.
- SONIA futures 0.5-12.0 higher, ~75.5bp of cuts showing through year-end.
- No surprises of note when it comes to the conventional issuance outlined in the DMO’s FQ1 issuance calendar (detailed in earlier bullets).
- Only lower tier UK data is due today, which will leave focus on cross-market cues and U.S. event risk (headlined by NFPs and comments from Fed Chair Powell).
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
EQUITY TECHS: E-MINI S&P: (H5) Double Top Reversal Threat
- RES 4: 6178.75 High Dec 6 ‘24 and key resistance
- RES 3: 6166.50 High Jan 19
- RES 2: 6019.64 50-day EMA
- RES 1: 5884.00/5924.0 High Mar 4 / Low Feb 25
- PRICE: 5825.75 @ 07:12 GMT Mar 5
- SUP 1: 5744.00 Low Mar 4
- SUP 2: 5730.00 Low Sep 18 ‘24
- SUP 3: 5698.25 Low 50.0% retrace of the Aug 5 - Dec 6 ‘24 bull leg
- SUP 4: 5658.00 Low Sep 12 ‘24
A sharp sell-off in the S&P E-Minis contract this week, reinforces a short-term bear threat. The contract traded to a fresh short-term cycle low yesterday - price has breached support at 5809.00, the Jan 13 low. This highlights a stronger reversal and a double top pattern on the daily scale. A resumption of weakness would open 5698.25, a Fibonacci retracement. Initial firm resistance to watch is 6019.64, the 50-day EMA.
GILTS: Expect a Volatile Open
- Also for Supply this Morning, UK £4.25bn 2030, would equate to 20.5k Gilt, could weigh, although EGBs are already deep in the red, so will be a punchy open for the Gilt contract.
- At current levels, sees a whopping wide 91.43/92.52 range for Calls.
EUROSTOXX50 TECHS: (H5) Bullish But Support Remains Exposed
- RES 4: 5611.50 2.500 proj of the Nov 21 - Dec 9 - 20 ‘24 price swing
- RES 3: 5606.00 3.000 proj of the Dec 20 ‘24 - Jan 8 - 13 price swing
- RES 2: 5600.00 Round number resistance
- RES 1: 5575.00 High Mar 3 and the bull trigger
- PRICE: 5498.00 @ 07:02 GMT Mar 5
- SUP 1: 5373.00 Low Mar 4
- SUP 2: 5328.00 Low Feb 106
- SUP 3: 5281.53 50-day EMA
- SUP 4: 5112.00 Low Feb 3 and a key support
The trend in the Eurostoxx 50 futures contract remains bullish and Monday’s strong start to the week reinforces current conditions. However, the contract has traded in a volatile manner this week and pulled back from Monday’s high. Key S/T support at 5394.00, the Feb 28 low, has been pierced. A clear break of it would signal scope for a deeper retracement towards the 50-day EMA at 5281.53. For bulls, a resumption of the trend would open 5600.00.
