RUSSIA: Latest Macro Data Suggests Russian Economy Heading for Stagnation

Gilts firm alongside core global FI peers with any selling pressure at the open quickly countered.

• A reminder that the reintroduction of fiscal risk premium to gilts after Chancellor Reeves’ apparent u-turn on income tax hikes triggered a sharp sell off in UK paper on Friday.
• Futures little changed at 92.15 after the bearish correction extended further on Friday.
• Initial support of note located at 91.82, while bulls will need to close Friday’s opening gap lower (93.35) to start turning the technical tide back in their favour.
• Yields 1.0-2.5bp lower, curve bull steepens.
• Benchmark yields have registered the highest level of November over the past couple of sessions.
• Weekend press reports were focused on smaller taxes and opinion pieces surrounding fiscal policy, nothing to really move the market.
• Gilt/Bunds ~185.5bp, little changed after lodging the highest close since Oct 21 on Friday.
• BoE MPC member Mann will speak this afternoon (13:20 London). A reminder that we have previously suggested that speeches from MPC members outside of Governor Bailey are likely to have less impact for markets in the run up to the December decision (given their entrenched views).
• CPI data (Wednesday) headlines this week’s UK calendar (see our gilt Week Ahead & morning STIR bullet for more on that release, our full preview will cross in due course).

• RES 4: 93.33 Low Nov 13 a gap high on the daily chart 
• RES 3: 93.07 20-day EMA        
• RES 2: 92.85 High Nov 14 
• RES 1: 92.44 50-day EMA  
• PRICE: 92.12 @ 08:10 GMT Nov 17
• SUP 1: 91.94 Intraday low       
• SUP 2: 91.82 High Sep 11 and a former key breakout level
• SUP 3: 91.67 50.0% retracement of the Sep 3 - Nov 4 bull leg   
• SUP 4: 91.12 61.8% retracement of the Sep 3 - Nov 4 bull leg  

Gilt futures gapped sharply lower on Friday. For now, a move down is considered corrective and the next key support to watch lies at 91.82, the Sep 11 high and a former key breakout level. Moving average studies remain in a bull-mode position, highlighting a dominant uptrend. First resistance to watch is 92.85, the Nov 14 high. On the downside, a break of 91.82, the Sep 11 high, would strengthen a bear theme.

Swiss GDP growth surprised to the downside in Q3, at -0.5% Q/Q (-0.1% consensus, 0.1% Q2), seeing its worst quarterly growth rate since Q1 2020.

• While undoubtedly weak, we do not see how the (singular) print should move the needle for the SNB, which views its monetary policy already as "accommodative". Downside pressure on inflation for continued headline CPI readings below 0% would likely be needed to put an SNB cut below 0% firmly on the table again.
• "Driven by a sharp decline in value added in the chemical and pharmaceutical sector, industry as a whole recorded negative growth. The services sector grew at a below-average rate", SECO adds.
• Forward-looking forecasts are more optimistic; KOF institute revised upwards its Swiss GDP forecasts late Friday, saying they "expect annual GDP growth [to rise] by between 0.3% and 0.5% compared to a tariff rate of 39%. This means that the seasonally adjusted economic growth forecast for 2026, currently estimated at 0.9%, will once again be well above 1%".