SONIA: SONIA FIX - 16/04/25

UBS expect the FY25/26 gilt remit to provide fresh steepening pressure for the 2s10s curve.

• A couple of other factors also play into their view:
• They expect “an uneventful MPC to offer little support to gilts, especially since the data following the last meeting has also been relatively strong”.
• They are also of the view that “the broad-based deterioration in consumer confidence and ongoing drag from higher mortgage payments are posing downside risks to growth forecasts.” 

• EUR/USD: $1.0600(E5.6bln), $1.0840-50(E790mln), $1.0900(E571mln)
• USD/JPY: Y146.90-15($1.2bln), Y149.00-15($1.1bln)
• GBP/USD: $1.3300(Gbp1.1bln)
• EUR/GBP: Gbp0.8435(E830mln)

• RES 4: 113-04+ 2.0% 10-dma envelope 
• RES 3: 112-13   1.500 proj of the Jan 13 - Feb 7 - Feb 12 price swing
• RES 2: 112-01/02 High Mar 4 / 1.382 proj of Jan 13-Feb 7-12 swing
• RES 1: 111-25   High Mar 11  
• PRICE:‌‌ 110-24+ @ 10:35 GMT Mar 17 
• SUP 1: 110-12+/110-00 Low Mar 6 & 13 / High Feb 7        
• SUP 2: 109-31+ 50-day EMA and a key near-term support 
• SUP 3: 109-13+ Low Feb 24
• SUP 4: 108-21   Low Feb 19 

The trend condition in Treasury futures remains bullish and the current consolidation marks a pause in the uptrend. A bull theme is reinforced by MA studies that are in a bull-mode condition, highlighting a dominant uptrend and positive market sentiment. Recent gains have resulted in a print above 111-22+, the Dec 3 ‘24 high. A clear breach of this level would open 112-02 and 112-13, Fibonacci projections. Firm support is 110-00, the Feb 7 high.