GILT AUCTION RESULTS: 4.25% Dec-49 Gilt Tender

• Overall, general dollar weakness has been evident as news was received surrounding the Fed’s DoJ subpoenas in reference to building renovations. This has reignited independence risks and a put the ‘sell-America’ trade back on the short-term agenda. Despite this, the Japanese yen has failed to receive a meaningful boost to start the week, with a brief flurry down to 157.52 well supported during APAC hours.
• Domestic factors are certainly playing their part here, as Friday’s reports of PM Takaichi dissolving the Lower House and associated speculation that she could call for a snap election continues to rise. The Yomiuri newspaper has reported that Feb. 8 or Feb. 15 are likely dates for this to occur.
• Technically, last week’s breach of 157.89 for USDJPY was a meaningful development, confirming a resumption of the medium-term uptrend. The next significant topside target will be 158.87, last year’s high and a key resistance. Support to watch lies much lower down at 155.35, the 50-day EMA.
• Naturally, the latest leg lower for the yen is prompting renewed speculation for potential intervention from the MOF, and sure enough, officials have been hardening their language in recent weeks. However, it is worth noting that USDJPY was around 2.5% higher than current levels when intervention commenced in 2024.
• Additionally, ING point out that based on those last interventions, they still suspect there may be a preference to wait for a USD-negative market event (previously a cool US CPI report) to intervene.

The trend structure in WTI futures remains bearish and recent gains still appear corrective - for now. Moving average studies are in a bear-mode position, highlighting a dominant downtrend. Note that resistance at the 50-day EMA, at $58.32, has been breached. This signals scope for a stronger corrective phase. Key resistance is at $61.25, the Oct 24 high. A resumption of the downtrend would open $53.77, a Fibonacci projection. The trend structure in Gold remains bullish and today’s strong start to this week’s session reinforces current conditions. Gold has cleared resistance at $4549.9, the Dec 26 high, to confirm a resumption of the primary uptrend. Sights are on the $4600.0 handle, where a break would open $4630.7, a Fibonacci projection. Initial firm support to watch lies at $4385.9, the 20-day EMA. A break would signal the start of a corrective phase.

• WTI Crude down $0.21  or -0.36% at $58.95
• Natural Gas up $0.09 or +2.68% at $3.254
• Gold spot up $78.96 or +1.75% at $4589.83
• Copper up $13.2 or +2.24% at $603.7
• Silver up $4.34 or +5.43% at $84.2305
• Platinum up $97.64 or +4.28% at $2377.78

A bull cycle in Eurostoxx 50 futures remains intact. Gains last week confirm a resumption of the primary uptrend. Note that MA studies are in a bull-mode position, highlighting a dominant uptrend. The 6000.00 handle has been breached, signalling scope for 6086.99 next, a Fibonacci projection. Initial firm support to watch is 5819.97, the 20-day EMA. A pullback would be considered corrective and allow an overbought condition to unwind. The trend structure in S&P E-Minis is unchanged, it remains bullish and price continues to trade above key near-term support at 6771.50, the Dec 18 low. Clearance of this level is required to signal scope for a deeper retracement and would also highlight a possible short-term reversal. For bulls, a fresh cycle high on Friday reinforces a bull theme. A resumption of the trend would open 7021.79, a Fibonacci projection.

• In China the SHANGHAI closed higher by 44.861 pts or +1.09% at 4165.287 and the HANG SENG ended 376.69 pts higher or +1.44% at 26608.48.
• Across Europe, Germany's DAX trades higher by 29.31 pts or +0.12% at 25290.73, FTSE 100 higher by 7.78 pts or +0.08% at 10132.54, CAC 40 down 19.98 pts or -0.24% at 8342.11 and Euro Stoxx 50 down 15.84 pts or -0.26% at 5981.63.
• Dow Jones mini down 370 pts or -0.74% at 49356, S&P 500 mini down 50.5 pts or -0.72% at 6954.5, NASDAQ mini down 257 pts or -0.99% at 25681.25.