STIR: ECB-dated OIS Exhibit Little Meeting-specific Conviction

Gilt futures trade through Friday’s lows & first support (90.65), before basing at 90.60 and recovering back above 90.70 

• Yields 0.5-1.0bp lower, curve bull steepens, consolidating the steepening seen in the second half of last week.
• 10s outperform both Tsys & Bunds at the margin, cross-market cues are providing the early impetus this week.
• Little of note on the local news front over the weekend, after Friday’s PSNB data revealed the latest instance of fiscal deterioration.
• We look at the implications of the BoE’s decision to target a GBP70bln APF reduction over the next year and will be watching ILTR/STR operations closely in coming weeks as supply-led reserve balances move below the top of the Bank's PMRR (preferred minimum range of reserves).
• Comments from BoE chief economist Pill are due this afternoon (13:30 London), followed by comments from Governor Bailey (19:00 London). Expect Pill’s comments to be of greater interest for markets, as he speaks on monetary policy frameworks, while Bailey speaks on supervisory matters.

• RES 4: $45.128 - 3.236 proj of the Jul 31 - Aug 14 - 20 price swing
• RES 3: $44.533 - 3.000 proj of the Jul 31 - Aug 14 - 20 price swing
• RES 2: $44.000 - Round number resistance
• RES 1: $43.773 - Intraday high       
• PRICE: $43.548 @ 08:16 BST Sep 22
• SUP 1: $41.052 - 20-day EMA 
• SUP 2: $39.402- 50-day EMA
• SUP 3: $36.965 - Low Aug 20  
• SUP 4: $36.216 - Low Jul 31 and a key support

Trend signals in Silver remain bullish. The metal is trading higher as the bull cycle extends. Note that moving average studies are in a bull-mode position, reinforcing current conditions. Sights are on the $44.00 handle next. Clearance of this level would pave the way for a climb towards 44.533, a Fibonacci projection. Initial firm support to watch lies at $41.052, the 20-day EMA. 

• RES 4: 1.4019 38.2% retracement of the Feb 3 - Jun 16 bear leg 
• RES 3: 1.3925 High Aug 22 and the bull trigger
• RES 2: 1.3890 High Sep 11
• RES 1: 1.3848 High Sep 15 
• PRICE: 1.3800 @ 08:07 BST Sep 22
• SUP 1: 1.3727 Low Aug 29 and a bear trigger  
• SUP 2: 1.3709 61.8% retracement of the Jul 23 - Aug 22 bull cycle
• SUP 3: 1.3658 76.4% retracement of the Jul 23 - Aug 22 bull cycle 
• SUP 4: 1.3637 Low Jul 25  

A sharp sell-off in USDCAD early last week resulted in a break of the 20-and-50-day EMAs. This undermines a recent bullish theme and exposes key short-term support at 1.3727, the Aug 27 low. A clear break of this level would strengthen a bearish threat and signal scope for a deeper retracement. For bulls, resistance levels to watch are; 1.3890, the Sep 11 high, and 1.3925, the Aug 22 high and bull trigger.