FED: Daly Reiterates Need For Further Tightening, Greater Passing Of Costs On

Block crossed at 1417:10ET - both trade through respective offers, but the 30Y ultra gap is wider:

• 1,500 TUZ6 101-26.62, through 101-26.5 post time offer, DV01 $231,000 vs.
• 6,000 WNZ6 104-29, through 104-28 post time offer, DV01 $226,000.

• RES 4: 0.8586 High Sep 29 
• RES 3: 0.8549 50-day EMA 
• RES 2: 0.8521 20-day EMA
• RES 1: 0.8493 High Oct 6 
• PRICE: 0.8450 @ 19:36 BST Oct 13
• SUP 1: 0.8442 Low Oct 13
• SUP 2: 0.8407 Low Jun 4 ‘25
• SUP 3: 0.8374 76.4% retracement of the 2024 - 2025 bull leg
• SUP 4: 0.8356 Low May 29 ‘25

A bear cycle in EURGBP remains in play and last week’s extension, plus a fresh cycle low this week, reinforces current conditions. The cross has pierced support at 0.8455, the Jul 15 low. A clear break of this level would confirm a resumption of the downtrend and open 0.8407, the Jun 4 2025 low. Further out, scope is seen for an extension towards 0.8374, a Fibonacci retracement point. Initial firm resistance to watch is 0.8521, the 20-day EMA.

• Crude oil has reversed declines earlier in the day, and is slightly higher overall, amid Houthi threats against Aramco facilities. Meanwhile, the market continues to weigh Strait of Hormuz vessel attacks against increased Persian Gulf crude supplies.
• WTI Nov 26 is up by 0.5% at $94.2/bbl.
• Yemen’s Houthis threatened to attack the Riyadh refinery following a Saudi-led coalition attack on an oil site in Sana’a. The US is facing increased pressure to aid Saudi Arabia to fight the Houthis and Iran continues to target commercial shipping.
• While President Trump posted on Truth Social to criticise the Houthi rebels, however, he refrained from any threat of direct US involvement in the conflict, a move that was reportedly considered but would likely trigger further escalation.
• The trend in WTI futures is bullish, with sights on the bull trigger at $101.69, the Sep 15 high. On the downside, the next key support to watch is $88.38 (pierced), the 50-day EMA. A clear break of it would undermine the bull theme and signal scope for a deeper retracement.
• Elsewhere, precious metals have edged lower, with spot gold down by 0.3% at $4,160/oz and silver falling by 1.6% to $59.3/oz.
• Conditions in gold remain bearish and the metal continues to trade closer to its recent lows. A continuation lower would pave the way for a move towards $3,943.3, the Jun 30 low and a key medium-term support. Initial firm resistance to watch is $4,267.4, the 50-day EMA.