TURKEY: CBRT Say Underlying Trend of Inflation Declined in December

RXH6 127.50/125.00 1x2 put spread paper paid 49 on 2K (vs. 127.60) on 2K.

• In the equity space, the recent pullback in S&P E-Minis has been a correction. A key short-term support has been defined at 6771.50, the Dec 18 low. A break of this level is required to signal scope for a deeper retracement and would highlight a possible short-term reversal. For bulls, sights are on key resistance at 7014.00, the Oct 30 high. Clearance of this hurdle would confirm a resumption of the primary uptrend.
• A bull cycle in EUROSTOXX 50 futures remains intact and the latest pullback appears to have been a correction. The first key support to watch lies at 5691.88, the 50-day EMA. A clear break of the EMA would highlight a potential short-term reversal. This would open 5622.00, the Nov 26 low. For bulls, sights are on key resistance at 5847.00, the Nov 13 high. The price pattern on Dec 18 is a bullish engulfing candle - a reversal signal.

Benchmark European & UK fixed income futures mostly stick within yesterday’s ranges, awaiting fresh cues.

• There has been little market feedthrough after the Kremlin accused Ukraine of launching a drone attack on Russian President Vladimir Putin's residence in the northwestern Novgorod oblast late on Monday. Russia will alter its stance in ceasefire negotiations and well-documented differences between the two parties remain.
• Bund futures -17 at 127.63.
• From a technical perspective, Bund futures remain in a clear downtrend and the latest move higher appears corrective.
• Initial support is located at yesterday’s low (127.31) followed by the bear trigger (126.75).
• The 20-day EMA (127.86 today) capped yesterday’s rally and presents initial resistance. A break above would expose the December 8 high (128.08).
• German yields 1.0-1.5bp higher. EGB spreads to Bunds little changed.
• Gilt futures +8 at 91.36 with core global FI markets off Monday highs.
• Our technical analyst notes that recent price action highlights the Dec 16 low (90.50), and the Nov 27 high (91.93) as the important short-term directional triggers.
• UK yields ~1bp lower, with 10s oscillating either side of 4.50% in recent weeks.
• EUR & GBP short ends little changed. Fairly modest odds of ECB tightening priced through ’26, while ~39bp of BoE rate cuts are priced through November.
• FOMC meeting minutes due later (19:00 London).
• A reminder that Eurex derivatives will close this evening and not reopen until Friday. Meanwhile STIR & bond futures and options trading on ICE Europe will cease at 12:15 tomorrow and resume on Friday.