POWER: Cez Boosts Output as 2GW Dukovany and Temelin Nukes Enter Winter Mode

Gilts take cues from EGBs in the wake of comments from the hawkish ECB Executive Board Member Schnabel, as she stressed her comfort with markets pricing rate hikes as the next move from the Bank.

• Firm wage indications in the latest REC report also factor into the move, even as the wider survey points to ongoing slack in the labour market.
• Futures sold off to 90.90, basing just above the December 2 low (90.87) before recovering to ~91.00 as of typing.
• Bullish short-term technicals remain intact. Fresh extension lower would target the November 25 low (90.53), while resistance comes in at the November 27 high (91.93).
• Yields 2.5-3.5bp higher, curve steeper.
• Benchmark yields are 7-9bp off last week’s lows after gilt bulls failed to force tests/breaks of November lows during last week’s rally.
• Comments are due from BoE's Taylor (17:30) & Lombardelli (18:30) although the topics of their addresses may limit the scope for comments on monetary policy (see prior bullet).
• Monthly economic activity data is due Friday.

• RES 4: $60.852 - 1.382 proj of the Oct 28 - Nov 13 - 21 price swing 
• RES 3: $60.000 - Psychological round number
• RES 2: $59.563 - 1.236 proj of the Oct 28 - Nov 13 - 21 price swing
• RES 1: $59.334 - High Dec 5   
• PRICE: $58.415 @ 08:20 GMT Dec 8
• SUP 1: $54.003 - 20-day EMA  
• SUP 2: $50.534/45.557 - 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 - price traded to a fresh all-time high last week. This confirms a resumption of the uptrend and maintains the bullish price sequence of higher highs and higher lows. The move above $55.00 signals scope for a climb towards $59.563 next, a Fibonacci projection. Sights are also on the $60.00 psychological handle. Initial support lies at $54.003, the 20-day EMA.

• RES 4: 92.55 High Nov 11 
• RES 3: 92.31 High Nov 12          
• RES 2: 92.00 Round number resistance
• RES 1: 91.93 High Nov 27      
• PRICE: 91.00 @ 08:03 Dec 8
• SUP 1: 90.87/90.53 Low Dec 2 / Low Nov 25       
• SUP 2: 90.28 Low Nov 21  
• SUP 3: 90.00 Round number support    
• SUP 4: 89.86 Low Nov 19 and the bear trigger     

A bullish short-term cycle in Gilt futures remains intact and the pullback between Nov 27 - Dec 2 appears to have been a correction. A resumption of gains would signal scope for a climb towards resistance at 92.55, the Nov 11 high. A gap in the daily chart has been filled and initial resistance to watch is 91.93, the Nov 27 high. For bears, a stronger reversal would instead refocus expose 90.53, the Nov 26 low. First support is 90.87, the Dec 2 low.