EURIBOR OPTIONS: Call OI Has Increased By Twice As Much As Puts Since Dec 18

• RES 4: 113-22+ High Nov 25 and a key resistance
• RES 3: 113-09   76.4% retracement of the Nov 25 - Dec 10 bear leg
• RES 2: 113-07   High Dec 3 
• RES 1: 112-31/113-00+ High Dec 18 / 61.8% of Nov 25 - Dec 10 leg
• PRICE:‌‌ 112-12 @ 15:53 GMT Dec 22
• SUP 1: 112-06/111-29   Low Dec 16 / 10 and the bear trigger
• SUP 2: 111-19   1.236 proj of the Oct 17 - Nov 5 - 25 price swing
• SUP 3: 111-11   1.382 proj of the Oct 17 - Nov 5 - 25 price swing 
• SUP 4: 111-00   Round number support 

Treasuries have pulled back from their recent highs. A key short-term resistance has been defined at 112-31, the Dec 18 high. Clearance of this level would signal scope for a stronger corrective phase and open 113-00 initially, a Fibonacci retracement point. For bears, a continuation lower would  refocus attention on 111-29, the Dec 10 low and a key short-term support. A breach of this support resumes the bear cycle that started Oct 17.   

In a statement, HM Treasury has confirmed that Chancellor of the Exchequer Rachel Reeves has asked the Office for Budget Responsibility to prepare an economic and fiscal forecast that she will deliver as the 'Spring Forecast' to the House of Commons on Tuesday, 3 March 2026. 

• The statement says "the Spring forecast will not make an assessment of the government’s performance against the fiscal mandate and will instead provide an interim update on the economy and public finances. The government will respond to the March forecast through a statement to Parliament, in line with the government’s commitment to deliver one major fiscal event a year at the Budget."
• Despite the pledge of only one major fiscal event a year, Reeves was forced into policy announcements in the 2025 Spring Statement due to the UK's worsening fiscal landscape. A number of the spending cuts announced were reversed before implementation due to backbench Labour MP opposition, in turn pushing Reeves into significant tax increases in November's Budget statement. 

• Financing needs for 2026 total E24.677bln (E8.871bln from MT/LT redemptions, E5.200bln interest on debt, E8.790bln of early repayments (including T-bill stock reduction), E6.739bln from other cash requirements (RRF loans, capital increases etc). This is partially offset by a projected primary surplus of E6.510bln.
• Financing sources:
  • GGB issuance E8.000bln (E8.0bln 2025 plan, E6.2bln executed).
  • Other financing sources (NGEU, EIB, CEB, etc.) E4.200bln
  • Proceeds from equity and investment fund shares E618mln
  • Decrease in cash reserves: E11.859bln
• Three GGB auctions planned for H1, on Feb 11, Apr 15 and Jun 17. All re-openings.
• T-bill gross target appears unconfirmed. 12 auctions planned for H1.
• The full plan can be found here (link)