SPAIN: Governing Party's Offices Raided As Part Of Funding Probe

Recent weakness in WTI futures appears to have been corrective. Key support around the 50-day EMA, at $84.62, remains intact. It has been pierced, however, a clear break of it is required to signal scope for a deeper retracement. A continuation higher would open $104.34, the Mar 9 high and bull trigger. Clearance of this hurdle would confirm a resumption of the primary uptrend. Note that MA studies are in a bull-mode position. Gold is in consolidation mode and trading closer to its recent highs. A continuation higher would resume the correction that started on Mar 23 and pave the way for an extension towards the $5000.0 handle and 5107.6, a Fibonacci retracement point. Initial firm support to watch lies at $4554.2, the Apr 2 low. A break of this level would be bearish. Note that moving average studies are in a bear-mode position. This highlights a stronger bearish threat.

• WTI Crude up $2.19 or +2.32% at $96.55
• Natural Gas up $0 or +0.16% at $2.528
• Gold spot down $3.21 or -0.07% at $4707.02
• Copper up $1.2 or +0.2% at $610.15
• Silver down $0.15 or -0.19% at $75.574
• Platinum up $13.44 or +0.67% at $2031.07

The latest pullback in EuroStoxx 50 future for now, appears to be corrective. Support to monitor lies at levels around the 50-day EMA - currently at 5783.06. It has been pierced, a clear break of this average would signal scope for a deeper retracement. The recent breach of 5945.47, the 76.4% retracement for the Feb 26 - Mar 23 bear leg, is notable. This exposes key resistance and the bull trigger into 6143.00, the Feb 26 high. The primary long-term uptrend in S&P E-Minis remains intact and recent all-time cycle highs reinforce this condition. The move higher also maintains the trend sequence of higher highs and higher lows. Price has pierced the 7200.00 handle exposing 7271.91, a Fibonacci retracement projection. Note that moving average studies are once again in a bull-mode position, a strong bullish signal. Initial support lies at 6964.63, the 20-day EMA.

• Japan's NIKKEI closed higher by 821.18 pts or +1.38% at 60537.36 and the TOPIX ended 18.69 pts higher or +0.5% at 3735.28.
• Elsewhere, in China the SHANGHAI closed higher by 6.444 pts or +0.16% at 4086.344 and the HANG SENG ended 52.42 pts lower or -0.2% at 25925.65.
• Across Europe, Germany's DAX trades higher by 104.83 pts or +0.43% at 24230.35, FTSE 100 lower by 4.83 pts or -0.05% at 10373.37, CAC 40 up 14.2 pts or +0.17% at 8172.02 and Euro Stoxx 50 up 9.45 pts or +0.16% at 5892.93.
• Dow Jones mini down 67 pts or -0.14% at 49325, S&P 500 mini down 5.25 pts or -0.07% at 7189, NASDAQ mini up 6.25 pts or +0.02% at 27439.75.

Sell-side strategist notes that we have read expect the BoE to avoid providing a hawkish surprise at this week’s MPC decision given March’s experience, with some deploying tactical dovish positions in the SONIA space (all of those surveyed by BBG look for no change in Bank Rate). Early May local election considerations are becoming more prominent in long end thoughts.

• Bank of America: The narrative at the front-end may be shifting towards delayed, but more persistent policy tightness, with implied cumulative rate hikes by March 2027 back towards the upper end of the recent trading range but we don’t enter flatteners for now. Further out, gilts are now possibly exposed to some steepening ahead of May elections and after the DMO's 2026/27 remit revision did not result in material long-end supply reduction. Our conviction remains that any government response to recent geopolitical developments is likely to be targeted and temporary, with costs in the low single-digit billions.
• Citi: Since March, BoE Governor Bailey has pushed back on hike pricing suggesting the market is getting ahead of itself. The ability to jaw-bone the market by the Governor is a powerful tool that seems diminished. Given the experience of the last meeting, and with the market still skittish, we’d argue that BoE can’t afford to risk another sharp sell-off, which argues for a dovish lean. Most importantly, the bullish momentum from the (Iran) conflict ceasefire has given way to a concern the situation could deteriorate. That leaves us strategically bullish the front-end but tactically sidelined for now. We still believe that the BoE is most likely to hold all year, but this can only be low conviction in the current circumstances. Hike premium is only likely to be taken out in a slow, non-linear fashion.
• Goldman Sachs: The BoE is likely to signal ongoing patience in response to the Iran energy shock. However, the potential for votes for hikes may limit relief for front-end gilts. We ultimately think that yields will settle lower, as macro data eventually reveals that the BoE can remain on hold for ‘26 - and may potentially cut in ‘27. However, the near-term risk from a dovish BoE and lower front-end yields is that the inflationary residual from even a de-escalation will see the market shift from pricing a hawkish policy response - via higher front-end rates - to pricing a higher country risk premium in the gilt curve. With markets alert to political risks ahead of the May local elections, we prefer to express tactical bullish gilt views at the front-end of the curve.
• J.P.Morgan: We expect a wait-and-see approach at BoE meeting. We tactically receive Jun ‘26 MPC OIS although we recommend investors express this view with a tight stop. We keep bearish hedges via Dec ‘26 SONIA put fly and front/green SONIA conditional bear flattener. We don’t expect the 2s/10s gilt curve to start to price in increased political and fiscal term premia from a potential leadership challenge to PM Starmer just yet. Even if Labour performs as poorly as suggested by the opinion polls, we think any potential leadership challenge is likely to take some time to emerge. Keep 10-Year swap spread narrowers as a medium-term view on increased fiscal and political risk premia.
• TD Securities: Data have suggested that the economy is not as vulnerable as anticipated at the beginning of the year. A similar message in the MPC statement could be bearish for duration and curve. Nonetheless, we also believe that the ongoing bearish bias in Gilts has not gone unnoticed by BoE members. We still see levels above 5% in 10s as a good entry for longs. We remain biased for long front-end ASWs.