SONIA: Citi Recommend Selling SFIZ5/Z6

Modest downticks in core global FI markets as NASDAQ 100 e-minis hit fresh session highs.

• A downtick in oil has provided some insulation from the uptick in equities seen over the last ~90 minutes, helping core global FI markets to hold away from worst levels of the session.

• In the FI space, for now, a short-term bearish theme in Bund futures remains intact. The contract has traded through support at the 50-day EMA, at 130.53. This signals scope for a deeper retracement and this week’s extension strengthens the current bearish threat. A continuation lower opens 129.28, 50.0% of the Mar 11 - Apr 7 rally. It is still possible that the move down since Apr 22 is a correction. Initial resistance to watch is 130.72, the 20-day EMA.
• The latest pullback in Gilt futures appears corrective - for now. However, the contract has traded through support at the 50-day EMA, at 92.46. The breach signals scope for a deeper retracement and Monday’s move down resulted in a print below 91.73, the Apr 17 low. An extension of the bear leg has exposed 91.43, the Apr 15 low (pierced). A clear break of this level would expose 90.92, the 76.4% retracement of the Apr 9 - May 2 rally. Initial firm resistance is seen at 92.57, the 20-day EMA. A breach of this hurdle would ease bearish pressure.

• EU1b 5Y Fixed (May 21, 2030) at MS+65 (MNI saw a good chance for a E1.0-1.5bln transaction size)
  • Revised guidance MS+70a (+/-5) will price in range, guidance MS+80 area
  • Books above EU3.4b (including JLM interest): Leads
  • Coupon: Annual, act/act ICMA
• Format: Reg S CAT1, registered, senior unsecured
• Settlement: May 21, 2025
• ISIN: XS3075496896
• Bookrunners: BNPP (B&D), GS, JPM
• Timing: May price today

Details as per Bloomberg