UK T-BILL AUCTION RESULTS: 1/3/6-Month UKTBs

OI data points to net long setting dominating in the whites and blues, while net short cover was most prominent in the reds and greens as SOFR futures rallied on Friday.

• Net long setting in SFRZ5 provided the dominant net positioning swing (~+131K), driven by NY Fed President Williams pointing to room for a rate cut in the "near-term". That represented an ~8.9% rise in OI in that specific contract.

• In the equity space, S&P E-Minis remain in a short-term bear-mode condition and weakness last week reinforces current conditions. The breach of 6655.70, the Nov 7 low cancels recent bullish signals and signals scope for an extension of the corrective cycle. Sights are on 6540.25 (pierced), the Oct 10 low and a key support. A clear break of it would open 6476.62, the 23.6% retracement of the Apr 7 - Oct 30 uptrend. Initial firm resistance to watch is 6735.63, the 20-day EMA.
• Last week’s sell-off in EUROSTOXX 50 futures highlights a stronger corrective cycle. The contract has breached two key support points; 5597.64, the 50-day EMA, and 5626.50, the base of a bull channel drawn from the Aug 1 low. The breach signals scope for a deeper pullback and opens 5427.01, the 61.8% retracement of the Aug 1 - Nov 13 bull cycle. Initial firm resistance to watch is 5633.27, the 20-day EMA.

The 129.00 figure has contained upside in Bund futures this morning, keeping resistance at the 50-day EMA of 129.04 intact. Rallies short of this level will be considered corrective for now.  Bunds are + 3 ticks at 128.89 at typing.

• The German curve has bull flattened, with yields flat to 2bps lower on the session. Modest downside in oil/gas futures and a move away from highs for equities have provided background support for bonds.
• Long-end German ASWs saw a brief bout of widening pressure after an interview with an Executive Board member of the DFA was released. However, the moves quickly faded. Although DFA will take into account term premium when considering the maturity structure of next year’s debt sales, total issuance could still exceed E500bln.
• 10-year EGB spreads to Bunds are marginally narrower on the session. No material underperformance for OATs after the National Assembly rejected the Revenue section of the 2026 budget over the weekend. Meanwhile, Italy’s ratings upgrade from Moody’s was in line with expectations.
• In data, the German November IFO Business Climate Index fell slightly, underperforming expectations at 88.1 (88.5 consensus, 88.4 prior). The current assessment reading improved marginally this time (85.6 vs 85.5 cons; 85.3 prior) but remained within recent ranges at a subdued level, while expectations were the driver behind the overall deterioration (90.6 vs 91.6 cons and prior).
• This week’s primary regional focus is the November flash inflation round, which begins on Friday.