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• RES 4: 94.75 76.4% of the Dec 3 ‘24 - Jan 13 bear leg (cont)   
• RES 3: 94.50 High Apr 7 and key resistance       
• RES 2: 94.00 Round number resistance
• RES 1: 92.88/93.93 Intraday high / High May 2                            
• PRICE: 92.70 @ 08:09 BST May 6
• SUP 1: 92.45 Intraday low                                       
• SUP 2: 91.73/91.43 Low Apr 17 / 15 
• SUP 3: 90.47/89.99 Low Apr 11 / 9     
• SUP 4: 89.68 Low Jan 15 (cont) 

A bull cycle in Gilt futures remains intact and short-term weakness is - for now - considered corrective. Today’s low print has resulted in a test of support at the 50-day EMA, at 92.46. A clear break of this average would signal scope for a deeper retracement and expose 91.73, the Apr 17 low. On the upside, a resumption of gains would open 94.50, the Apr 7 high and a key resistance. Initial firm resistance to monitor is 93.93, the May 2 high.

Gilts lower at the open, extending Friday’s sell off, taking cues from the weakness in global peers over the long weekend.

• The firm prices paid component in the U.S. ISM services survey and a reversal of Monday’s losses in oil are eyed.
• Futures through Friday’s low (92.84) and the 20-day EMA (92.65), basing at 92.45 before rebounding to 94.60.
• Next support of note located at the April 17 low (91.73).
• Yields 1.5-4.5bp higher, curve steeper.
• 10s last ~4.55% after basing at 4.408% last week.
• Curves remain in multi-week ranges. 2s10s ~17bp off cycle highs, last 67.3bp. 5s30s ~14bp off cycle highs, last 133.7bp.
• GBP STIRs roughly in line with pre-gilt open levels covered earlier, showing ~90bp of cuts through year-end, with a 25bp cut fully discounted come the end of this week’s MPC decision.
• We expect a 25bp cut this week, in line with market pricing and all sell-side views we have read.
• We have outlined some potential dovish tweaks to the Bank’s guidance verses in the statement, which could pave the way for consecutive rate cuts over the next 3 meetings.
• Final services PMI data is due today, although that should be much less of a market mover.

• SPAIN APRIL SERVICES PMI 53.4 (FCAST 54.0, MARCH 54.7)