BONDS: EGBs-GILTS CASH CLOSE: Gilts Slump As Geopolitics Simmer

• RES 4: 112-31   High Dec 18 and key short-term resistance
• RES 3: 113-04   76.4% retracement of the Nov 25 - Jan 20 bear leg  
• RES 2: 112-22   High Jan 7
• RES 1: 112-19   High Feb 10
• PRICE:‌‌ 112-16+  @ 17:34 GMT Feb 10
• SUP 1: 111-29/09 20-day EMA / Low Jan 20 and the bear trigger
• SUP 2: 111-00   Round number support
• SUP 3: 110-30+ 1.618 proj of the Oct 17 - Nov 5 - 25 price swing  
• SUP 4: 110-22+ 1.764 proj of the Oct 17 - Nov 5 - 25 price swing

A sharp rally in Treasuries last Thursday helped clear out resistance on the rally to 112-16+, and prices have gained again Tuesday, topping out at 112-19. Much of this week’s strength comes off the back of the break of the 20- and 50-day EMAs, with 112-22 the next notable resistance. This week’s price action challenges the bearish M/T condition - and only a reversal lower here and break of 111-09, the Jan 20 low, can resume the bear cycle.

• Japanese assets have firmed on Tuesday, bolstered by comments from Finance Minister Katayama, who appears to have successfully calmed the markets on the timing and financing of the sales tax cut. Stabilisation across the JGB curve has facilitated an extension of the Japanese yen rebound, with the USDJPY pullback from yesterday’s post-election high reaching 2.35% at today’s 154.06 low.
• Softer-than-expected US retail sales data appeared to have exacerbated the USDJPY decline, although the dollar has shown much broader stability against other G10 currencies. This dynamic has allowed cross/JPY to fall sharply, with the likes of GBPJPY and AUDJPY leading the declines.
• The sharp downswing for the GBPJPY today has seen spot narrow the gap substantially to the 50-day EMA, which intersects at 210.58. This average is notable given the fact we have not posted a daily close below it since October, and it acted as perfect support on Jan 26.
• The lack of any meaningful bounce for USDJPY following the US data despite broader greenback stability may leave the pair vulnerable to a further acceleration as we approach tomorrow’s US employment report. The next support of note is at 152.10, the Jan 27 low.
• In Norway, the January acceleration in CPI-ATE looks broad-based, with start-of-year price resets in the likes of rents and insurance highlighted. Any scope for payback in February won't be enough to ease Norges Bank concerns around inflation persistence, which leads EURNOK 0.65% lower on the session to fresh lows for 2026, narrowing the gap to support at the 2025 lows of 11.2614.
• Gradual downside momentum for EURCHF has been building in recent sessions. Session lows of 0.9095 represent the first test below 0.9100 since the removal of the peg in 2015.
• All focus turns to tomorrow’s US employment data. The report will need to be assessed holistically rather than focusing on any single number, although the unemployment rate should offer the cleanest single take.

• Date $MM Issuer (Priced *, Launch #)
• 02/10 $2.5B *Bank of England 3Y +5
• 02/10 $800M #Pulte Group $400M 5Y +62, $400M 10Y +87
• 02/10 $750M #Alexandria Real Estate 10Y +115
• 02/10 $750M #IADB 5Y SOFR+28
• 02/10 $500M #Loews Corp 10Y +80
• 02/10 $500M #Tyson 10Y +85
• 02/10 $Benchmark Sysco +5Y +70, 10Y +85
• 02/10 $Benchmark Dominican Republic 8Y 6.1%a, 12.25Y 6.5%a
• 02/10 $Benchmark Walt Disney 3Y +28, 3Y SOFR, 5Y +40, 10Y +58
• 02/10 $Benchmark Cencora 3Y +50, -5Y +62, 7Y +72, 10Y +80, 30Y +90