ICE EUA FUTURES TECHS: (Z5) Double Top Reversal

• Treasuries gap higher after PPI data for December comes out lower than expected. Tsy Dec'25 10Y trades up to 107-18.5 (+11), well below initial technical resistance at 108-21.5/109-06 (20-day EMA / High Dec 31), before scaling back to 107-16.5 last
• Curves remain mixed, 2s10s -.380 at 39.263, 5s30s +2.110 at 38.411. 10Y yield slips to 4.7471% low.

Chancellor of the Exchequer Rachel Reeves has delivered a short statement in the House of Commons following her trip to China over the weekend. Says “Security and economic growth go hand in hand...If we do not engage with China we cannot raise our real concerns.” The main focus will be on the chancellor's response to questions on the state of public finances and the ongoing financial market jitters hitting UK assets. Shadow chancellor Mel Stride says on the spike in borrowing costs and falling the pound “This is a crisis made in Downing Street,”.

• Livestream can be found here.
• Reeves: "We have seen global economic uncertainty play out over the past week...I acknowledge the economic headwinds facing the UK."
• Reeves: "We remain committed to [the gov'ts] fiscal rules...we will meet them at all times". 

New 3-year:

• Spread set earlier at MS+17bps (guidance was MS + 19 bps area)
• HR 105% vs 2.20% Apr-28 Bobl
• Tranche size set earlier at E6bln (guidance was E5bln, MNI expected E5-7bln)
• Books closed in excess of E82bln (inc E5.75bln JLM interest)
• Maturity: 4 July 2028
• Short first coupon | 108 days accrued
• ISIN: EU000A4D5QM6

3.375% Oct-54 Tap:

• Spread set earlier at MS+127bps (guidance was MS + 130 bps area)
• HR 91% vs 2.50% Aug-54 Bund
• Tranche size set earlier at E5bln in line with guidance (MNI expected E4-6bln)
• Books closed in excess of E115bln (inc E5bln JLM interest)
• Highest book for a tranche since 2021
• ISIN: EU000A3K4EY2 (Immediately fungible)

For both:

• Settlement: 21 January 2025 (T+5)
• JLMs: Barclays, BNP Paribas, J.P. Morgan (B&D/DM), LBBW, NatWest Markets
• Timing: Hedge deadline 13:45GMT / 14:45CET. Pricing later today