RUSSIA: Russia Would React to US Expansion in Greenland
- Rising production costs, OPEC+ oil production restrictions and lower commodity prices led to a significant drop in new wells and production drilling in Russia, Kommersant report. During the January-November period, figures were down 12.3% and 1.2%, respectively.
- Russia would react to any expansion of US military presence in Greenland, its ambassador to Denmark, Vladimir Barbin, told Danish newspaper Berlingske as per Bloomberg. “An attempt to ensure US national security at the expense of other countries’ interests is fraught with further deterioration of the situation in the Arctic and will be taken into account by Russia in its military planning,” Barbin said.
- There are no major data releases scheduled for today, or for the remainder of the week.
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GILTS: Following Peers Lower
Gilts follow core global FI peers lower at the open, with spillover from the previously covered technical break in Bunds seemingly playing a part.
- Little in the way of news flow to trigger this morning’s weakness in core global FI markets.
- Futures -19 at 95.57 vs. lows of 95.45.
- Initial support at the Dec 4 low (95.49) pierced. Fresh downside would expose the November 28 low (95.17), although the short-term bullish corrective phase in the contract remains intact.
- Yields 1.0-2.5bp higher, 10s lead the sell off.
- Spread to Bunds 1bp wider at ~216bp, sticking to the recent range. 220bp caps, while stickier UK inflation and fiscal/issuance risks in the UK limit pullbacks.
- SONIA futures a little softer given the weakness in bonds, last flat to -2.5.
- BoE-dated OIS prices 82bp of cuts through ’25 vs. 84bp at yesterday’s close/early today.
- Supply-wise, the DMO will sell GBP1.5bln of the Nov-33 I/L line this morning.
- Little of note on the UK data calendar today, which will leave focus on cross-market spillover and the U.S. CPI release.
STIR: Euribor Futures Weaken Alongside Core FI
Euribor futures are flat to -1.5 ticks through the blues, weakening alongside core FI over the past ~45 minutes. Today’s regional calendar is light, with focus on tomorrow’s US CPI report and Thursday’s ECB decision.
- End-2025 OIS implied ECB rates are ~0.5bp less dovish than yesterday’s close, with 150bps of easing priced.
- Analysts overwhelmingly favour a 25bp cut at Thursday’s decision, but generally view the risks of a 50bp cut as greater than the ~5% discounted in OIS markets.
- Meanwhile, there are 32bps of sequential cuts priced through the January decision.
- German final inflation confirmed flash estimates at 2.4% Y/Y, while Italian October industrial production is due at 0900GMT/1000CET.
| Meeting Date | ESTR ECB-Dated OIS (%) | Difference Vs. Current Effective ESTR Rate (bp) |
| Dec-24 | 2.905 | -25.9 |
| Jan-25 | 2.587 | -57.7 |
| Mar-25 | 2.262 | -90.3 |
| Apr-25 | 2.028 | -113.6 |
| Jun-25 | 1.862 | -130.2 |
| Jul-25 | 1.781 | -138.3 |
| Sep-25 | 1.720 | -144.5 |
| Oct-25 | 1.690 | -147.5 |
| Dec-25 | 1.662 | -150.2 |
| Source: MNI/Bloomberg. | ||
SILVER TECHS: Corrective Bounce Extends
- RES 4: $35.226 - 61.8% of the 2011 - 2020 major bear leg
- RES 3: $35.167 - 2.00 proj of the Aug 8 - 26 - Sep 6 price swing
- RES 2: $33.125/34.903 - High Nov 1 / High Oct 23 and the bull trigger
- RES 1: $32.283 - High Dec 9
- PRICE: 31.734 @ 08:10 GMT Dec 10
- SUP 1: $29.642 - Low Nov 28
- SUP 2: $28.446 - 76.4% retracement of the Aug 8 - Oct 23 bull cycle
- SUP 3: $27.686 - Low Sep 6
- SUP 4: $26.451 - Low Aug 8
Silver is holding on to its recent gains. Despite a recovery in price, the bear cycle that started Oct 23 remains in play and gains are considered corrective - for now. Price has recently traded through a trendline drawn from the Aug 8 low. A resumption of the bear leg would open $28.446, a Fibonacci retracement. The 50-day EMA, at $31.154, has been pierced. A continuation higher would expose $33.125, the Nov 1 high.
