FRANCE DATA: Business Confidence Broadly Stronger, But Employment A Touch Weaker
French business confidence saw a third consecutive 1 point rise to 99 in December, the highest since June 2024. The rise was driven mainly by strength in the manufacturing and retail components, with moderate growth in construction, and stable services.
- The only downward driver was the employment indicator, which fell 1 point to 94, unwinding November's rise.
- This release is broadly consistent with recent flash PMIs which showed stronger-than-expected manufacturing and weaker services sentiment.
- Manufacturing confidence grew 4 points to 102, the highest since March 2024. INSEE notes that the increase stemmed from the "sharp rise in the balance of opinion regarding past production trends and order books".
- Also underlying the manufacturing strength, INSEE notes a 15 point rise in confidence in the "manufacture of other transport equipment" sector. We note that this sector has seen recent strength driving French industrial production data.
- Services sentiment remained stable at 98, with the expected employment subcomponent falling 4 points.
- Retail sentiment saw an 8 point jump to 104, the highest since January 2024, while construction rose 1 point to 96 (though November was revised down 1 point on a rounded basis).
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GILTS: Yields Edge Lower As Equities Soften
Gilt yields little changed to ~1bp lower as global equities weaken, light steepening bias.
- Gilt futures trade +9 at 92.48. Initial support and resistance 91.94 & 92.85. Our technical analyst still deems the recent weakness to be corrective at this stage.
- 2s10s within 1bp of the October closing high (74.26bp) and 5s30s a little over 1bp off its October closing high (140.12bp).
- Gilt/Bunds 183bp after failing to push above 185bp in recent sessions, still holding most of the recent recovery from sub-175bp.
- Immediate focus remains on tomorrow’s inflation data (click for our full preview) and next week’s Budget.
- Comments from BoE’s Pill (voted to leave rates unchanged earlier this month) & Dhingra (the most dovish MPC member) are due today.
- A reminder that we do not expect much market vol. to stem from any non-Bailey BoE comments in the lead up to the December decision, given the entrenched views of the other MPC members (Bailey is deemed the key swing voter).
- On the supply front, the DMO will come to market with GBP1.25bln of the 4.75% Dec-30 gilt via tender this morning
US DATA: Jobless Claims Data For W/E Oct 18 Slightly Above MNI's Estimates
At the time using state-level data, MNI had estimated jobless claims in the week to Oct 18 to be a seasonally adjusted 227k - so 5k below the 232k figure being presented here.
Data for the week-ending Sep 20 and Sep 13 are also available:
- Sep 20: 219k vs MNI estimate of 218k
- Sep 13: 232k vs MNI estimate of 231k
Note that data for the week ending Oct 18 is technically a payrolls reference period, as was the week ending Sep 13 (that's possibly why the Oct 18 is being published now). The DOL source we posted earlier suggests claims data for the week ending Sep 27, Oct 4 and Oct 11 are not yet available.
SILVER TECHS: Pullback Appears Corrective
- RES 4: $56.153 2.500 proj of the Aug 20 - Sep 16 - 17 price swing
- RES 3: $55.444 2.382 proj of the Aug 20 - Sep 16 - 17 price swing
- RES 2: $55.000 Round number resistance
- RES 1: $54.480 - High Oct 17 and the bull trigger
- PRICE: $49.956 @ 08:25 GMT Nov 18
- SUP 1: $49.363 - Intraday low
- SUP 2: $47.390/45.557 - 50-day EMA / Low Oct 28
- SUP 3: $41.135 - Low Sep 17
- SUP 4: $38.087 - Low Aug 27
Trend signals in Silver remain bullish and the latest pullback appears corrective, for now. Support to watch lies at 50-day EMA, at $47.390. A clear breach of this average would signal scope for a deeper retracement. On the upside, a resumption of gains would refocus attention on the bull trigger at $54.480, the Oct 17 high. Clearance of this level would confirm a resumption of the primary uptrend and open $55.444, a Fibonacci projection.
