EUROPEAN INFLATION: French Flash July HICP Slightly Above Consensus

• RES 4: 6300.00 Round number resistance       
• RES 3: 6281.12 1.618 proj of the Apr 7 - 10 - 21 price swing
• RES 2: 6277.50 High Feb 19 and a bull trigger
• RES 1: 6265.50 High Jun 30    
• PRICE: 6243.25 @ 07:25 BST Jul 1  
• SUP 1: 6087.08/5964.66 20- and 50-day EMA values
• SUP 2: 5811.50 Low May 23    
• SUP 3: 5645.75 Low May 7
• SUP 4: 5500.00 Low Apr 30

The trend condition in S&P E-Minis is unchanged, it remains bullish and the contract has started this week on a firm note. Short-term resistance and a bull trigger at 6128.75, the Jun 11 high, has recently been breached. The clear break confirms a resumption of the uptrend that started Apr 7. The 6200.00 handle has been cleared too, this opens 6277.50, the Feb 21 high and bull trigger. Key support is at the 50-day EMA - at 5964.66.

• The DMO will kick off issuance for the week this morning with GBP2.0bln nominal of the 1.50% Jul-53 green gilt on offer via auction.
• The auction follows last week’s soft 15-year 4.375% Jan-40 gilt auction (which saw a tail of 1.0bp) and the even softer tender of the off-the-run long 20-year 4.25% Dec-46 gilt which saw a tail of 1.5bp.
• Both of those auctions saw the publication of the results pull gilt futures lower and with this even longer duration 1.50% Jul-53 green gilt auction coming on the day of the welfare reform Commons vote, there is scope for another soft auction here.
• Comparing to recent auctions of this gilt, the nominal size matches that of the February auction but is smaller than any auction held in 2024.
• Tails have varied a little but most auctions have been between 0.3-0.6bp (with an October 2023 auction seeing a tail of 1.0bp).
• This is the only green gilt auction planned in FQ2 and will see the 1.50% Jul-53 green gilt reach a similar terminal size to other 30-year gilts issued over the past couple of years.
• Timing: The auction window will close at 10:00BST with results announced soon after. As this is a green auction there will be no PAOF held.

RXV5 126.50/125.0/125.00p fly, bought for 12 in 2k.