ELECTRICITY: UK to Stop Accepting New Power Grid Projects From 29 January

Gilts tick away from session highs and SONIA markets unwind some of the dovish repricing seen ahead of the UK flash PMI data, with the release’s snippets surrounding firmer inflation driving the initial market reaction.

• 76.5bp of BoE cuts priced though ’25 vs. 79bp into the data.
• GBP rallies in tandem, cable briefly above 1.2670, hitting a fresh session high, before fading back to 1.2660. First resistance of note not seen until the 20-day EMA (1.2716). However, the bearish theme in the pair prevails, leaving Friday’s low (1.2609) exposed.

Note: Edits title from "Wage Details" to "Inflation Details"

A bearish threat in WTI futures remains present and last week’s gains are - for now - considered corrective. A resumption of the bear cycle would open $65.74, the Oct 1 low, and $63.90, the Sep 10 low and key support. For bulls, a stronger reversal to the upside would instead refocus attention on the key short-term resistance at $77.04, the Oct 8 high. Initial firm resistance to watch is unchanged at $72.41, the Nov 7 high. Gold has pulled back from its recent highs. Trend signals remain bullish and a move lower is considered corrective. A key short-term resistance at $2721.4, the Nov 25 high, has been pierced and this represents a positive development. A continuation higher would expose key resistance at $2790.1, the Oct 31 high. Clearance of this level would confirm a resumption of the primary uptrend. First key support is $2605.3, the Nov 26 low.

• WTI Crude down $0.69 or -0.97% at $70.62
• Natural Gas down $0.12 or -3.51% at $3.164
• Gold spot up $7.71 or +0.29% at $2656.1
• Copper down $0.3 or -0.07% at $419.65
• Silver up $0.1 or +0.31% at $30.648
• Platinum down $0.87 or -0.09% at $926.19

A bull cycle in the Eurostoxx 50 futures contract remains intact and price continues to trade closer to its recent highs. The contract has recently breached the 50-day EMA. The clear break of this average strengthens a bullish theme and note that 4961.00, the Nov 6 high, has also been cleared. Sights are on 5015.00 next, the Oct 29 high. Key support is 4699.00, the Nov 19 low. Initial support to watch lies at 4902.90, the 20-day EMA. The S&P E-Minis contract remains bullish and the latest shallow pullback is considered corrective. Recent gains confirm a resumption of the uptrend and signal scope for a continuation near-term. Note that moving average studies are in a bull-mode set-up, highlighting a dominant uptrend and positive market sentiment. A resumption of the trend would open 6194.19, a Fibonacci projection. Initial support to watch lies at 6097.76 the 20-day EMA.

• Japan's NIKKEI closed lower by 12.95 pts or -0.03% at 39457.49 and the TOPIX ended 8.23 pts lower or -0.3% at 2738.33.
• Elsewhere, in China the SHANGHAI closed lower by 5.547 pts or -0.16% at 3386.331 and the HANG SENG ended 175.75 pts lower or -0.88% at 19795.49.
• Across Europe, Germany's DAX trades lower by 58.69 pts or -0.29% at 20347.66, FTSE 100 lower by 18.11 pts or -0.22% at 8281.98, CAC 40 down 43.3 pts or -0.58% at 7366.27 and Euro Stoxx 50 down 14.34 pts or -0.29% at 4953.61.
• Dow Jones mini up 21 pts or +0.05% at 43886, S&P 500 mini up 6.5 pts or +0.11% at 6062, NASDAQ mini up 41.75 pts or +0.19% at 21836.5.