POWER: EdF Keeps Only Flamanville 2 on 2025 Corrosion Plan

Gilts have recovered from session lows, with Tsys bid in the wake of the weekly ADP employment reading and oil markers off session highs.

• Futures +7 at 92.46, with earlier session highs of 92.60 untested.
• Initial support and resistance located at 91.94 & 92.85. Our technical analyst still deems the recent weakness to be corrective at this stage.
• Yields unchanged to 2bp lower, curve steeper.
• 2s10s through October closing highs, next upside level of note located at the September/cycle closing high (81.63bp).
• Gilt/Bunds ~2bp wider at 184bp, with those looking for further widening still unable to establish themselves above 185bp after the recovery from sub-175bp levels.
• SONIA futures flat to +2.5, BoE-dated OIS pricing 19bp of easing for next month.
• Nothing in recent comments made by BoE chief economist suggest that he will vote for a December cut. By the time that he is comfortable that risks aren't to the upside, the wider MPC may have already voted to cut rates, changing the equation again as we approach neutral.
• CPI data headlines tomorrow, market pricing points to greater sensitivity to a firm reading than a soft print.
• Our preview of the release is here.

• RES 4: 6993.12 3.500 proj of the Aug 20 - 28 - Sep 2 price swing
• RES 3: 6953.75 High Oct 30 and bull trigger 
• RES 2: 6900.50 High Nov 12 
• RES 1: 6793.65 20-day EMA  
• PRICE: 6670.75 @ 14:32 GMT Nov 18
• SUP 1: 6600.00 Round number support   
• SUP 2: 6571.25 Low Oct 17
• SUP 3: 6540.25 Low Oct 10 and a key support 
• SUP 4: 6476.62 23.6% retracement of the Apr 7 - Oct 30 uptrend 

S&P E-Minis maintain a softer short-term tone. The breach of support at 6655.70, the Nov 7 low cancels recent bearish signals and signals scope for an extension of the current corrective cycle. Note that price has also breached support at the 50-day EMA. An extension would open 6540.25, the Oct 10 low and the next key support. Initial firm resistance to watch is 6793.65, the 20-day EMA.

• "*CHINA DIPLOMAT DISSATISFIED WITH RESULT OF JAPAN MEETING: PAPER" (BBG)
  • "Chinese diplomat Liu Jinsong says he is “of course dissatisfied” with result of his meeting with Masaaki Kanai, the Japanese foreign ministry official in charge of Asia and Oceania affairs, Chinese news outlet The Paper reports."
• Earlier, the SCMP said Beijing could step up military and coastguard activities near Japan if tensions escalate further following Japanese Prime Minister Sanae Takaichi's provocative remarks on Taiwan, citing analysts.
• Indeed, Reuters wrote that Japan has warned its citizens in China to step up safety precautions and avoid crowded places, amid a deepening dispute between Asia's two largest economies over the new PM’s comments on Taiwan.
• ING have noted that the sudden escalation in Japan-China tensions has already triggered retaliatory measures from Beijing, including travel restrictions, aimed at hurting Japan’s profitable tourism business. They said that high-level diplomatic talks are already scheduled, and risks of further escalation do not seem too high.