REFINING: CDU Rates at China’s State-Owned Refineries Fall: OilChem

RBC recommend receiving Dec ’25 BoE vs. paying the ECB equivalent.

• They write “market pricing is almost identical for further rate cuts from the ECB and BoE at around 10bp for the rest of the year. We strongly believe out of the two central banks the BoE is more likely to cut again and therefore like the risk/reward in paying the ECB December meeting and receiving the BoE December meeting. We particularly see scope for the BoE market pricing to shift, if there is an easing in some of the UK data”.
• They go on to flag that “crucial to this is the fact that the ECB has signalled that its cycle is most likely over, while the BoE retains a cutting bias. We think a couple of dovish data releases could easily bring back alive the possibility of a cut this year. Meanwhile, it's a challenge to imagine a scenario where the ECB cuts again and the BoE doesn't follow (i.e. excluding a global shock)”.

• RES 4: 113-00   Round number resistance 
• RES 3: 112-28+ 1.764 proj of the Jul 15 - 22 - 28 price swing  
• RES 2: 112-19   1.764 proj of the Jul 15 - 22 - 28 price swing  
• RES 1: 112-15+ High Aug 5 and the bull trigger
• PRICE:‌‌ 112-05 @ 10:56 BST Aug 27
• SUP 1: 111-25   20-day EMA
• SUP 2: 111-14+ 50-day EMA
• SUP 3: 111-13+ Low Aug 18  
• SUP 4: 110-25   Low Aug 1 

The trend outlook in Treasury futures remains bullish and the contract continues to trade above support at the 50-day EMA, at 111-14+. A clear break of this average would expose support at 110-25, the Aug 1 low. For bulls, attention is on 112-15+, the Aug 5 high and the bull trigger. Clearance of this hurdle would resume the uptrend and pave the way for a climb towards 112-19 initially, a Fibonacci projection.

• MNI: UK CBI AUG DIST TRADE REPORTED SALES -32
• UK CBI AUG DIST TRADE EXPECTED SALES -16