EQUITIES: EU Cash opening calls
Nov-18 07:53
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- CAC: +0.70%
- FTSE +0.24%
- SMI +0.37%
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GILT AUCTION PREVIEW: 1.00% Jan-32
Oct-19 07:35
- The DMO will return to the market this morning at a later time than usual with GBP3.25bln nominal of the 10-year 1.00% Jan-32 gilt on offer.
- The gilt was last sold just two weeks ago and saw a bid-to-cover of 2.50x and a tail of 0.3bp (on a smaller nominal size of GBP3.00bln).
- The 1.00% Jan-32 gilt will be on offer again on 15 November and 13 December with the DMO looking to issue a new Jan-33 gilt in the new year.
- At the time of writing despite gilts trading lower (yields higher) the market seemed to be coping adequately with the announcement last night that active gilt sales would begin for shorts and mediums (but not longs) with the first operation on 1 November.
- Timing: Note that today's auction closes at 11:30BST (NOT the usual 10:00BST). The same timing change has been seen for the auction scheduled for 16 November (the next CPI release date).
- A further GBP812.5mln will be available to successful bidders through the PAOF.
GILTS: 30-year yields steady as yields across the rest of the curve rise
Oct-19 07:13
- Gilt futures have opened lower following the announcement that the Bank of England would press ahead with active gilt sales from 1 November (and following the maringally higher than expected CPI print this morning).
- However, the Bank's confirmation that they would not sell any long-dated (20+ year) gilts in Q4-22 has seen 30-year yields flat on the day, and hence a decent flattening in 10s30s.
- 2y yields up 6.0bp today at 3.586%, 5y yields up 6.8bp at 3.942%, 10y yields up 7.0bp at 4.012% and 30y yields down -0.3bp at 4.296%.
- 2s10s up 1.0bp today at 42.6bp and 10s30s down -7.3bp at 28.4bp.
USDCAD TECHS: Corrective Pullback
Oct-19 07:09
- RES 4: 1.4040 76.4% retracement of the 2020 - 2021 bear cycle
- RES 3: 1.4016 3.382 proj of the Aug 25 - Sep 7 - 13 price swing
- RES 2: 1.4000 Psychological round number
- RES 1: 1.3898/3977 High Oct 14 / 13 and the bull trigger
- PRICE: 1.3767 @ 08:08 BST Oct 19
- SUP 1: 1.3649 20-day EMA
- SUP 2: 1.3503 Low Oct 4 and a key support
- SUP 3: 1.3401 50-day EMA
- SUP 4: 1.3358 Low Sep 21
USDCAD continues to trade below last week’s high of 1.3977 (Oct 13). Despite the pullback, the uptrend remains intact. The latest recovery from 1.3503, Oct 10 high, reinforces bullish conditions and this low represents a key short-term support. Moving average studies still highlight an uptrend and 1.3838, the Sep 30 high and key resistance has been cleared, strengthening bullish conditions. First support to watch is 1.3649, the 20-day EMA.
