BUND TECHS: (H6) Approaching The 50-Day EMA
- RES 4: 129.66 High Nov 12
- RES 3: 128.75 High Dec 3 and a key resistance
- RES 2: 128.52 High Dec 5
- RES 1: 128.34 50-day EMA
- PRICE: 128.22 @ 10:19 GMT Jan 7
- SUP 1: 127.13/126.75 Low Jan 6 / Low Dec 22 and the bear trigger
- SUP 2: 126.53 Low Mar 11 (cont.) and a key support
- SUP 3: 126.35 3.236 projection of the Nov 12 - 20 - 26 price swing
- SUP 4: 126.20 3.382 projection of the Nov 12 - 20 - 26 price swing
Short-term gains in Bund futures appear corrective, however, today’s gains do undermine the bear theme and attention turns to resistance around the 50-day EMA, at 128.34. A clear break of this average would highlight a stronger reversal and signal scope for a continuation higher, towards 128.75, the Dec 3 high. Key support and the bear trigger is unchanged at 126.75, the Dec 22 low.
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DUTCH T-BILL AUCTION RESULTS: DTC Results
| Type | 2.5-month DTC | 5.5-month DTC |
| Maturity | Feb 26, 2026 | May 28, 2026 |
| Amount | E1.09bln | E780mln |
| Target | E0.5-1.5bln | E0.5-1.5bln |
| Previous | E1.98bln | E1.12bln |
| Avg yield | 1.979% | 1.975% |
| Previous | 1.964% | 1.968% |
| Bid-to-cover | 2.13x | 2.68x |
| Previous | 1.88x | 1.87x |
| Previous date | Nov 17, 2025 | Nov 17, 2025 |
GILTS: Futures Hover Above Support After Sell Off, Hawkish Move In SONIA
Gilts sell off on bearish cues from EGBs in the wake of some typically hawkish remarks from ECBs Schnabel and firming wage indications in the latest REC report on jobs
- Futures trade as low as 90.88, basing just above the December 2 low (90.87).
- Bullish short-term technicals remain intact despite today’s sell off.
- Fresh extension lower would target the November 25 low (90.53), while resistance comes in at the November 27 high (91.93).
- Yields 3-4bp higher, 5- to 10-Year zone leads the weakness.
- Gilt/Bund spread little changed around 168bp.
- Gilt outperformance vs. Bunds stalled around the 165bp level last week, after the spread tightened by ~25bp since November 12.
- The speed of the tightening, coupled with ongoing medium-term UK fiscal fisks, have been cited as limiting factors by some.
- BoE-dated OIS still pricing over 80% odds of a December rate cut.
- SONIA futures flat to -5.0. Terminal rate pricing 3.42% after trading between 3.30-3.35% for much of last week. November lows in SFIZ6 (96.550) remain untested.
- Comments are due from BoE's Taylor (17:00) & Lombardelli (18:30), although the topics of their addresses may limit the scope for comments on monetary policy.
- Further out, UK monthly economic activity data is due Friday.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA (bp) |
Dec-25 | 3.758 | -21.5 |
Feb-26 | 3.692 | -28.1 |
Mar-26 | 3.620 | -35.3 |
Apr-26 | 3.528 | -44.5 |
Jun-26 | 3.484 | -48.9 |
Jul-26 | 3.425 | -54.8 |
Sep-26 | 3.416 | -55.7 |
OPTIONS: Expiries for Dec08 NY cut 1000ET (Source DTCC)
- EUR/USD: $1.1650(E831mln), $1.1670(E587mln), $1.1800(E1.8bln), $1.2140(E2.9bln)
- USD/JPY: Y155.00($1.2bln), Y156.00($1.5bln)
- AUD/USD: $0.6475-80(A$1.0bln)
- USD/CAD: C$1.3940($841mln)
