OIL: 2026 Surplus to Weigh on Prices: ING

For the full document click here.

• We look at how the BOE has changed market drivers and focus in the coming weeks and what you need to watch going forward.
• We also look at the upcoming events for the week ahead including the syndication and weekend fiscal highlights.
• There continues to be focus on UK lending operations with RONIA spiking once again, we look at this in a bit more detail but expect that RONIA will remain elevated until Thursday's STR operation.
• We also summarise the latest BOE MaPS survey - with early expectations for the remit revision and a drop in the median expectation of the neutral rate to 3.00% for the first time since early 2024.
• In addition we include balance sheet trackers, issuance calendars and an updated DMO issuance profile.

• On the commodity front, the downleg in Gold that started Oct 20 appears to have been a correction and has allowed an overbought condition to unwind. Price remains above a key support area at the 50-day EMA, at $3880.7. Clearance of this EMA would strengthen a short-term bear theme and signal scope for a deeper retracement. Initial resistance is at $4161.4, the Oct 22 high. A stronger recovery would refocus attention on $4381.5, the Oct 20 high and bull trigger.
• The latest pullback in WTI futures appears to be a flag formation - a bullish continuation pattern. This suggests that a bullish corrective cycle remains intact for now. Price has recently traded through the 50-day EMA, at $60.87, signalling scope for a stronger recovery. Note too that resistance at $62.34, the Oct 8 high, has been pierced. A clear move through it would expose key resistance at $65.77, Sep 26 high. The bear trigger is $55.96, the Oct 20 low.

• Treasuries have pared losses but still sit comfortably lower on the day in response to improved odds of the government shutdown ending after eight centrist Democrats on Sunday voted with Republicans on a new CR to fund the US government through Jan 30.
• Today’s docket focus should be on front-loaded supply ahead of Veterans Day tomorrow, with a 3Y auction along with heavy bill issuance.
• Cash yields are 2.4-3.3bp higher on the day, with increases slightly led by the belly possibly ahead of that 3Y supply.  
• TYZ5 trades at 112-20 (-07+) off an earlier low of 112-15 on reasonable overnight volumes nearing 340k.
• Resistance is seen at Friday’s joint high of 113-02 (Nov 5 & 7 highs, a key level), but a bear threat is still present at 112-06 (Sep 25 low) before which lies 112-09+ (Nov 5 high) and other various support levels.
• Data: No releases of note.
• Fedspeak: Daly on Bloomberg TV (0830ET), Musalem on Bloomberg TV (0945ET)
• Coupon issuance: US $58B 3Y Note Auction - 91282CPK1 (1300ET). Last month’s 3Y auction stopped through by 0.8bp although saw both the bid to cover and indirect take receded.
• Bill issuance: US Tsy $86B 13W & $77B 26W bill auctions (1130ET) and $95B 6W bill (1300ET)
• Politics: Trump in bilateral meeting with President of Syria (1100ET), Trump participates in swearing-in ceremony for Ambassador to Republic of India (1500ET)