COMMODITIES: Continuation Lower for WTI Could Expose Bear Trigger at $55.96
A sell-off in WTI futures on Tuesday strengthened a bearish theme. A continuation lower would pave the way for a move towards key support and the bear trigger at $55.96, the Oct 20 low. Clearance of this level would confirm a resumption of the downtrend. Note that it is still possible a bullish corrective cycle remains in play. Resistance to watch is $62.59, the Oct 24 high. Clearance of this hurdle would signal scope for a stronger correction. Gold is trading closer to this week’s high. The downleg since Oct 20 appears to have been a correction and has allowed an overbought condition to unwind. Recent gains suggest that correction is over. Key support lies at the 50-day EMA, at $3921.1. Clearance of this EMA would signal scope for a deeper retracement. For bulls, a continuation higher would pave the way for a test of $4381.5, the Oct 20 high and bull trigger.
- WTI Crude up $1.15 or +1.96% at $59.76
- Natural Gas down $0.09 or -1.98% at $4.555
- Gold spot down $1.07 or -0.03% at $4169.47
- Copper down $2.9 or -0.57% at $507.3
- Silver up $0.43 or +0.83% at $52.712
- Platinum down $24.65 or -1.55% at $1560.29
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EQUITIES: Large Estoxx Option Flows
- SX5E (19th Dec) 4400p, trades 10.80 and 11.00 in 44k.
- SX5E (20th Mar) 4800p, trades 58 in 33k.
- SX5E (18/12/26) 5600^, trades for 770.8 in 15k.
GERMAN AUCTION RESULTS: 30-Year Bunds
| 0% Aug-50 Bund | 2.90% Aug-56 Bund | |
| ISIN | DE0001102481 | DE000BU2D012 |
| Total sold | E1bln | E1.5bln |
| Allotted | E757mln | E1.182bln |
| Previous | E822mln | E1.13bln |
| Avg yield | 3.14% | 3.17% |
| Previous | 3.04% | 3.25% |
| Bid-to-offer | 1.53x | 1.11x |
| Previous | 2.28x | 1.37x |
| Bid-to-cover | 2.02x | 1.40x |
| Previous | 2.78x | 1.82x |
| Avg Price | 46.43 | 94.74 |
| Low Price | 46.41 | 94.74 |
| Pre-auction mid | 46.374 | 94.631 |
| Prev avg price | 46.78 | 93.27 |
| Prev low price | 46.74 | 93.27 |
| Prev mid-price | 46.729 | 93.156 |
| Previous date | 19-Mar-25 | 17-Sep-25 |
GILTS: Firmer On Global Cues
Gilts have rallied, largely on spillover from wider core global FI markets.
- The reduction of short-term French political risks and late Tuesday comments from Fed Chair Powell (pointing to further rate cuts and the potential for the end of QT in the coming months) have provided the support.
- Gilts outperform swaps following Powell’s comments.
- Futures trade as high 92.41 before fading to 92.27 last.
- Fresh extension higher would target projection resistance (92.72).
- Yields 3-4bp lower across the curve, wings underperform.
- 10s pierced support at the August 11 low (4.548%). Uptrend support drawn from the Dec ’24 low was also tested (4.536%). The next level of note below there is the August low (4.496%), which equates to 92.73 in futures today.
- 30s have broken through uptrend support drawn off the April low (5.370%) and trade ~5bp above their August low (5.309%).
- This morning’s I/L supply saw a solid cover ratio (~3.5x), but pricing was on the soft side.
- The rally further out the curve has allowed yesterday’s dovish move in GBP STIRs to extend.
- SONIA futures flat to +3.0.
- BoE-dated OIS pricing ~10bp of easing through year-end.
- BoE’s Ramsden didn’t touch on monetary policy in his morning address.
- Fellow Deputy Governor Breeden is unlikely to cover monetary policy when she speaks later.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA (bp) |
Nov-25 | 3.944 | -2.4 |
Dec-25 | 3.870 | -9.7 |
Feb-26 | 3.733 | -23.4 |
Mar-26 | 3.690 | -27.8 |
Apr-26 | 3.590 | -37.8 |
Jun-26 | 3.558 | -40.9 |
Jul-26 | 3.500 | -46.7 |
Sep-26 | 3.484 | -48.3 |
