CAPITAL GOODS: Rolls-Royce (ROLLS Baa3/[P]/BBB[P]/BBB-[P]): 4Q24 Results Out

• The DMO will announce at 7:30GMT whether it will hold a tender on Thursday this week for a potential conventional sub-5 year gilt (and the size of the tender).
• As we noted yesterday, we think that the 0.125% Jan-26 gilt (ISIN: GB00BL68HJ26) is the most likely candidate with a size of GBP1.0-2.0bln probable.
• See our rationale in our bullet yesterday.

Norwegian SA retail sales excluding motor vehicles fell 0.1% in December, while November’s reading was revised up a tenth to 0.4%. On a 3m/3m basis, sales grew 0.5% for the second consecutive month, and rose 0.7% Y/Y (vs 0.2% prior).  Similar dynamics were observed in retail sales excluding motor vehicles and fuel (1.0% 3m/3m vs 1.3% prior; 3.0% Y/Y vs 0.9% prior).

• Statistics Norway notes that pharmacies, grocery stores and stores selling beverages saw lower retail sales in December, but this was offset by increases in online shopping (for Christmas in particular).
• Overall, retail trade looks to have outperformed the -0.3% Q/Q expectation from contacts in the Q4 Regional Network Survey.
• The household goods consumption index – which feeds into the quarterly GDP calculation – fell 1.1% M/M in December but rose 1.0% on a 3m/3m basis (vs 0.5% prior).

• RES 4: 122.85 High Dec 11     
• RES 3: 120.98 61.8% retracement of the Dec 11 - Jan 13 bear leg   
• RES 2: 120.45 High Jan 2   
• RES 1: 119.78 50-day EMA  
• PRICE: 119.07 @ Close Jan 28 
• SUP 1: 118.27/117.16 Low Jan 16 / 13 and the bear trigger          
• SUP 2: 116.59 76.4% retrace of the Jun - Dec ‘24 bull cycle (cont)
• SUP 3: 116.07 Low Jul 8 ‘24 (cont)
• SUP 4: 115.45 Low Jul 3 ‘24 (cont)     

The latest rally in BTP futures highlights a corrective phase. The 20-day EMA has been breached and this exposes the next firm resistance at 119.78, the 50-day EMA. Clearance of the 50-day average would strengthen a bullish condition. The medium-term trend condition remains bearish and the pullback from last Wednesday’s high may be an early reversal signal. The bear trigger has been defined at 117.16, the Jan 13 low.