UK DATA: Construction PMI due at 9:30BST
Apr-04 08:17
- This data is a little more in focus this month after notable falls over the past two months from 53.3 in December to 48.1 in January and 44.6 in February.
- It's still not a data point that we normally place too much weight on, and doesn't correlate that well historically with ONS construction data (that makes up around 6-7% of GDP).
- However the press release noted that last month's print saw residential building decreasing at the fastest pace since early-2009 (outside of the pandemic), the fastest pace of employment reduction since May 2020 (largely due to not replacing leavers) and "new work and input buying fall at fastest pace for almost five years."
- There is obviously a lot going on in markets at the moment, but whether we see a stabilisation in this data point will be worth watching this morning.
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GILTS: Pressured By Bund Sell Off, 10-Year Spread Sub-200bp
Mar-05 08:16
{GB} GILTS: Gilts follow peers lower.
- Futures as low as 92.12, before trading back to 92.25, still ~130 ticks lower on the day.
- Key short-term support at 91.79, the Feb 20 low
- Yields 8-11bp higher, curve steeper as increasing global debt supply is priced in.
- Last night’s tabled German fiscal reform (much larger and expedited vs. expectations) and signs that Trump may moderate tariffs against Mexico & Canada drive the early sell off.
- Notable tightening vs. Bunds across EGBs, Tsys & gilts underscores that German fiscal headlines are the main driver of the move, although Bunds have edged away from session lows in recent trade.
- 10-Year gilt/Bund spread on track for the lowest close since late October, last ~8bp tighter at 196.5bp, trading comfortably below the psychological 200bp mark.
- Immediate support in the spread at the Oct 30 closing level (196.4bp).
- In local news, BBC sources have suggested that “the Treasury has earmarked several billion pounds in draft spending cuts to welfare and other government departments ahead of the Spring Statement.” Macro impulses dominate.
MNI: SPAIN FEB SERVICES PMI 56.2 (FCST: 55.5); JAN 54.9
Mar-05 08:15
- MNI: SPAIN FEB SERVICES PMI 56.2 (FCST: 55.5); JAN 54.9
- SPAIN FEB COMPOSITIE PMI 55.1 (FCST: 54.8); JAN 54.0
GOLD TECHS: Support At The 50-Day Is Intact For Now
Mar-05 08:10
- RES 4: $3000.0 - Psychological round number
- RES 3: $2972.0 - 2.0% 10-dma envelope
- RES 2: $2962.2 - 2.00 proj of the Nov 14 - Dec 12 - 19 price swing
- RES 1: $2930.1/2956.2 - High Feb 26 / 24 and the bull trigger
- PRICE: $2918.5 @ 08:09 GMT Mar 5
- SUP 1: $2884.5/2832.7 - 20-day EMA / Low Feb 28
- SUP 2: $2812.4 - 50-day EMA
- SUP 3: $2758.3 - Low Jan 30
- SUP 4: $2730.6 - Low Jan 27
The recent pullback in Gold appears to be a correction. The move through the 20-day EMA does signal scope for an extension towards the next important support around the 50-day EMA, at $2812.4. However, this week’s gains are a positive development and potentially an early reversal signal. A stronger rally would refocus attention on the next objective at $2962.2, a Fibonacci projection. This would also open the $3000.0 handle.
