RENEWABLES: CWE Morning Wind Forecast

• What will the MPC make of the data? We had already argued following the August meeting that the 4 hawkish dissenters were unlikely to change their vote until December at the earliest.
• The peak unlikely to be changing is likely to be the key for the remaining members so we don't think today's data changes things too much. But Ramsden is very focused on the labour market (which wasn't quite as soft as expected last week) so his vote for November already had a small question mark against it. And given that the surprise today was caused by food price inflation that will factor into the thinking of Bailey and Breeden, who we think are the true swing voters here.
• The market was already only pricing in 7bp for November as of yesterday's close, however, and cumulatively 12bp by December.
• We still think both meetings are in play albeit far from certain. And we will have the Budget before the December meeting, more detail on whether the inflation peak is likely to influence 2026 pay settlements and know the level of the peak of CPI by then too.
• So overall we don't think today's data will realistically push back expectations of cuts substantially.

• RES 4: $3547.9 - 1.764 proj of the Feb 28 - Apr 3 - Apr 7 price swing
• RES 3: $3500.1 - High Apr 22 and bull trigger
• RES 2: $3451.3 - High Jun 16  
• RES 1: $3409.2/3439.0 - High Aug 8 / 23             
• PRICE: $3324.2 @ 07:25 BST Aug 20
• SUP 1: $3268.2 - Low Jul 30 
• SUP 2: $3248.7 - Low Jun 30 and the bear trigger
• SUP 3: $3204.7 - Low May 20
• SUP 4: $3121.0 - Low May 15 and key support 

Despite the latest pullback, a bull cycle in Gold remains intact. Moving average studies are in a bull-mode position. The sideways trend that has been in place since the Apr peak appears to be a corrective phase - a pause in the uptrend. A resumption of gains would open $3439.0, the Aug 23 high. Key resistance and the bull trigger is at $3500.1, the Apr 22 low. On the downside, first support to watch lies at $3268.2, the Jul 30 low.

Ahead of today’s new 7-year RFGB syndication, Danske Bank note that “Finland will have fulfilled more than 85% of the 2025 issuance target after the transaction if it sells EUR3bn. Fair value relative to the Finnish ASW-spread curve vs 6M Euribor is MS+29bp”.

• Note that MNI also pencils in a E3bln WNG transaction.