EU CREDIT UPDATE: Average Cash Moves (Source: MNI, Bloomberg Finance L.P.)

• In the FI space, a bear cycle in Bund futures remains intact and the contract is trading just ahead of its recent lows. Support at 128.52, the 76.4% retracement of the Sep 25 - Oct 17 bull leg, has been pierced. A clear break of this handle would signal scope for an extension towards 128.25, the Oct 7 low. Key short-term resistance is seen at 129.40, the Nov 13 high. Clearance of this hurdle would signal a reversal. First resistance is 129.09, the 50-day EMA.
• The recent sharp pullback in Gilt futures still appears corrective and the next key support to watch lies at 91.82, the Sep 11 high and a former key breakout level. Moving average studies remain in a bull-mode position, highlighting a dominant uptrend. First resistance to watch is 92.85, the Nov 14 high. For bears, a break of 91.82, the Sep 11 high, would strengthen a bear theme and open 91.67, a 50.0% retracement of the Sep 3 - Nov 4 bull leg.

Facing Prime Minister's Questions in the House of Commons, PM Sir Keir Starmer refuses to rule out a freeze in income tax thresholds at next week's budget. Asked by Leader of the Opposition Kemi Badenoch first why the government briefed that it was looking at raising income tax in the Budget, before Chancellor of the Exchequer Rachel Reeves then decided against it, Starmer claims it "will be a Labour Budget with Labour values, that means we will focus on cutting NHS waiting lists, cutting debt and cutting the cost of living,”.

• Badenoch asks four times about income tax thresholds, at one point asking, “The Prime Minister needs to come clean, can he confirm that he won’t break another promise by freezing income tax thresholds?”
• Starmer does not answer directly, instead claiming “The budget is one week today, and we will lay out our plans. But what we won’t do,[...] is inflict austerity on the country as they did. What we won’t do is inflict a borrowing spree like Liz Truss inflicted and done huge damage...”
• The lack of a concrete answer from Starmer will be viewed as an effective admission that thresholds will be frozen. 
   

The latest Tsy quarterly futures roll volumes for December'25 to March'26 outlined below. Percentage complete still in the single digits ahead the "First Notice" date of Friday, November 28. Current roll details:

• TUZ5/TUH6 appr 13,400 from -5.88 to -5.62, -5.88 last; 5% complete
• FVZ5/FVH6 appr 172,500 from -2.75 to -2.25, -2.75 last; 11% complete
• TYZ5/TYH6 appr 29,200 from 1.5 to 2.0, 1.75 last; 12% complete
• UXYZ5/UXYH6 5,000 from 5.25 to 5.5, 5.25 last; 5% complete
• USZ5/USH6 3,600 from 13.0 to 13.75, 13.25 last; 8% complete
• WNZ5/WNH6 appr 3,300 from 9.75 to 10.25, 10.0 last; 6% complete
• Reminder, Dec'25 futures don't expire until next month: 10s, 30s and Ultras on December 19, 2s and 5s on December 31. Meanwhile, Dec'25 Tsy options will expire this Friday, November 21