EQUITY TECHS: E-MINI S&P: (M5) Trend Needle Points North

Fielding several questions surrounding the sell off in long end gilts. There hasn’t been a UK-specific trigger to explain the move.

• The move was definitely U.S. Tsy-led to start with, but it seems like this may have been the opportunity that some were waiting for when it comes to adding shorts further out the gilt curve, as multi-year/decade levels are broken in yields/curves. Futures also breached key support at 90.55, but have since retaken that level after bottoming at 89.99.
• The UK’s fiscal position remains delicate, with the potential for impending support for the auto sector (amongst others), stagnant economic growth and increasing gilt yields continuing to pressure UK finances.
• This makes gilts susceptible to such moves when broader core global FI markets come under pressure.

• -8,633 TYM5 110-11.5, sell through 110-13 initial post time bid at 0901:34ET, DV01 $545,000. The 10Y contract has since traded up to 110-21 last (-26)

SPX: 4,962.1 (-0.4%); DJIA: 37,306 (-0.9%/-340pts); NDX: 17,088.7 (-0.0%).