BUNDS: Tested session high post BoE

• In the FI space, the trend cycle in Bund futures remains bearish and last Friday’s sell-off plus Monday’s extension, reinforces this theme. Sights are on key support at 132.00, the Nov 6 low. Clearance of this level would strengthen a bearish theme. Initial resistance is seen at 133.48, last Friday’s high. Key short-term resistance is at 134.10, the 20-day EMA.
• The trend condition in Gilt futures is unchanged, it remains bearish and recent short-term gains appear to have been corrective. The recent breach of 91.87, the Dec 19 low, confirmed a resumption of the downtrend. Sights are on 91.58 next, a 4.382 projection of the Dec 3 - 4 - 5 minor price swing. Initial resistance is at 92.08, the Jan 2 high. Resistance at the 20-day EMA, is at 93.16, and the average is seen as an important hurdle for bulls.

ERG5 97.625/97.50ps 1x2, sold at 2.75 in 2.5k.

OI data suggests that net short setting in the reds and greens provided the most meaningful positioning swing on Monday, with little net OI change in the whites and a bias towards long cover seen in the blues.

• Net short setting in SFRZ6 provided the most meaningful positioning swing, although positioning movement in individual contracts appeared relatively limited on the day.