ENERGY SECURITY: Future Iran Conflict Leaves 9m b/d at Risk: Kpler

• "Nvidia aims to begin H200 chip shipments to China by mid-February, sources say"
• "Nvidia has told Chinese clients it aims to start shipping its second-most powerful AI chips to China before the Lunar New Year holiday in mid-February, three people familiar with the matter told Reuters."
• "The U.S. chipmaker plans to fulfil initial orders from existing stock, with shipments expected to total 5,000 to 10,000 chip modules - equivalent to about 40,000 to 80,000 H200 AI chips, the first and second sources said." - RTRS

• In the FI space, Bund futures remain in a clear downtrend and today’s bearish start to this week’s session reinforces current conditions. The break to a fresh cycle low today confirms a resumption of the downtrend and maintains the price sequence of lower lows and lower highs. Sights are on 126.53 next, the Mar 11 low (cont.). Initial firm resistance is seen at 128.01, the 20-day EMA. A break of this average would signal the start of a corrective bounce.
• Recent activity in Gilt futures highlights 90.50, the Dec 16 low, and 91.93, the Nov 27 high, as two important short-term directional triggers. A clear breach of support at 90.50 would signal scope for a deeper retracement towards 89.86, the Nov 19 low and a bear trigger. For bulls, a stronger resumption of gains and a breach of 91.93, would instead signal scope for a climb towards resistance at 92.55, the Nov 11 high.

Treasuries are modestly bear steeper on very thin volumes after the weekend, helped lower by a further sizeable sell-off in JGBs after last week’s BoJ hike to leave Treasuries underperforming EGBs. Moves are aided by further increases for crude oil and US equity futures, ahead of a light docket headlined by 2Y supply. 

• Cash yields are 0.5-2.4bp higher, with increases led by 20s.
• 2s10s at 67.5bps (+1.3bp) remains close to last week’s high of 69.1bp at interesting levels that prior to a brief spike to 73.8bp in early April was last higher in early 2022.
• TYH6 trades close to session lows of 112-11+ (-04+) on particularly low volumes of 165k.
• It has pulled back from recent highs, leaving a key short-term resistance level at 112-31 (Dec 18 high). Support is seen at 112-06 (Dec 16 low) whilst downside focus would be on a bear trigger at 111-29 (Dec 10 low).
• Data: Chicago Fed National Activity Index Sep (0830ET) – data picks up tomorrow including long-awaited Q3 GDP data
• Coupon issuance: US Tsy $69B 2Y Note auction - 91282CPS4 (1300ET). Last month’s auction saw a small 0.2bp tail although details firmed with bid-to-cover of 2.68 after 2.59 and indirect take-up rising to 58.1% from 53.65%.
• Bill issuance: US Tsy $86B 13W & $77B 26W bill auctions (1130ET)
• Politics: Trump’s schedule hasn’t been released yet