US TSY FUTURES: BLOCK: Large Dec'25 5Y Sale

For the full document including summaries of 18 sellside analyst views click here.

• This week’s CPI data has taken on added importance following the close 5-4 vote split at the last MPC meeting.
• Rather than services inflation, the MPC is focused on headline CPI which is expected to come in higher than in June (which saw some base effects weigh on aspects such as accommodation).
• From the previews that we have read the median expectation is for a 3.7%Y/Y (with a mean of 3.71%). This would be marginally below the BOE’s forecast of 3.76%Y/Y.
• The BOE forecast electricity and gas bills to fall 5.1%M/M in July whereas the Ofgem price cap fell 7.0%M/M. Some analysts did of course take the methodology change into effect but the difference between these two values on headline CPI will be just under 6bp which fully explains the gap between the BOE’s forecast and consensus.
• From the previews that we have read are lower for services than the BOE (4.8% median, 4.81% mean, 4.88% BOE). Interestingly, the overall expectation from the previews that we have read is that core will come in at 3.7% median / 3.69% mean (BOE 3.71%). But core goods is expected broadly in line with the BOE. These forecasts are therefore a little inconsistent.
• Food inflation is expected to increase further.
• And we look again at why CPI data is so important at the moment and how food prices can influence inflation expectations more than other goods / services.

SFIZ5 96.15/96.25/96.35/96.45c condor, sold at 2.75 in 6k.

• RES 4: 6600.00 Round number resistance
• RES 3: 6554.98 2.0% 10-dma envelope
• RES 2: 6523.63 1.764 proj of the May 23 - Jun 11 - 23 price swing 
• RES 1: 6508.75 High Aug 15 and Alltime High
• PRICE: 6462.75 @ 14:19 BST Aug 19
• SUP 1: 6399.62 20-day EMA
• SUP 2: 6313.25 Low Aug 6  
• SUP 3: 6275.86 50-day EMA
• SUP 4: 6239.50 Low Aug 1

The dominant uptrend in S&P E-Minis remains intact and the contract is trading just below its recent highs. Moving average studies are in a bull-mode position, highlighting a clear uptrend. A resumption of gains would pave the way for a climb towards 6523.63, a Fibonacci projection. On the downside, supports to watch are; 6399.62, the 20-day EMA, and 6275.86, the 50-day EMA.