SILVER TECHS: Short-Term Trend Set-Up Remains Bullish

• RES 4: 94.00 Round number resistance    
• RES 3: 93.79 High Mar 4 and a bull trigger         
• RES 2: 93.06 Low Mar 4 and a gap high on the daily chart  
• RES 1: 93.01 High Mar 20 and a short-term bull trigger                       
• PRICE: 91.63 @ Close Mar 24
• SUP 1: 91.07 Low Low Mar 13                                      
• SUP 2: 90.71 Low Mar 6 and a bear trigger  
• SUP 3: 90.49 1.618 proj of the Feb 6 - 20 - Mar 4 price swing  
• SUP 4: 90.19 1.764 proj of the Feb 6 - 20 - Mar 4 price swing

The short-term trend outlook in Gilt futures remains bearish and recent gains appear to have been a correction. Key short-term resistance has been defined at 93.01, the Mar 20 high. A break of this level is required to highlight a bullish condition. For now, attention is on support at 91.07, the Mar 13 low, and the bear trigger at 90.71, the Mar 6 low. A break of this level would confirm a resumption of the downtrend.

Sovereign rating reviews of note from after hours on Friday include:

• Morningstar DBRS upgraded Cyprus to A (low), Positive Trend
• Morningstar DBRS confirmed Finland at AA (high), Stable Trend
• Morningstar DBRS affirmed France at AA (high), Trend changed to Negative
• Morningstar DBRS confirmed Norway at AAA, Stable Trend

• There was a slight hawkish bias to Thursday’s MPC meeting from the 8-1 vote in favour of maintaining Bank Rate at 4.50%.
• The guidance was largely unchanged although there were some tweaks to the first guidance paragraph, however, with the main addition being a more explicit reference to potential second-round effects from near-term inflation increases.
• Perhaps the most significant thing to come out of the March MPC meeting was not an explicit view for now, but the lack of any discussion over the three cases that have previously been the bedrock of MPC communication for the past few months. Instead, the MPC outlined the intention for how its guidance would evolve under new scenarios.
• We note that Governor Bailey is due to deliver a speech on “growth in the UK economy” on Monday 24 March and it would be very possible that he could set out these new cases more granularly. If this was the case, we would expect other MPC members to stick to this new script and to move away from the old case 1/2/3 rhetoric.
• We have only seen one sellside forecast change following the March MPC meeting: All 24 analyst reviews that we read look for the next 25bp cut in May, 63% of analysts (15/24) expect a further 75bp of cuts across the year to 3.75% while over 3/5 of analysts (15/24, 63%) have their terminal rate base case in a 3.00-3.50% range.

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