GILTS: Limited GDP-Driven Bid Fades
Gilts fade the initial GDP-driven rally, with U.S. Tsys in line to below levels seen at yesterday’s gilt close.
- Futures as high as 94.89 before a fade back to 94.70.
- Initial support at the Nov 25 low (94.66) intact. Next support below there at the November 22 low (93.96).
- Initial resistance at the Dec 10 high (95.73)
- Yields within 1bp of yesterday’s closing levels, light twist steepening of curve.
- 2s10s still below October peak, although registered a multi-week high yesterday.
- 5s30s less than 0.5bp off late September high.
- Spread to Bunds 0.5bp tighter at 215bp, after the latest break above 220bp faded on Thursday.
- Relative fundamental/central bank/fiscal outlooks limit spread pullbacks at this stage.
- SONIA markets in line with levels flagged ahead of the gilt open, with only modest dovish moves seen after the data.
- Just under 80bp of BoE cuts priced through ’25.
- Cross-market cues and macro headline flow eyed for the remainder of the day, with little of note on the UK calendar
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USD: EURUSD tests support, USDJPY tests resistance
- US Tnotes (TYZ4) is still finding some demand in early trade, but the {r1} EURUSD is nonetheless making another attempt at the 1.0600 level, did print a 1.0595 low Yesterday, lowest print in a Year, since November 2023.
- USDJPY also makes another push towards the its intraday high of 155.15, immediate resistance is at 155.22 initially.
(Chart source: MNI/Bloomberg):
SILVER TECHS: Testing Trendline Support
- RES 4: $35.226 - 61.8% of the 2011 - 2020 major bear leg
- RES 3: $35.167 - 2.00 proj of the Aug 8 - 26 - Sep 6 price swing
- RES 2: $33.125/34.903 - High Nov 1 / High Oct 23 and the bull trigger
- RES 1: $32.107 - 20-day EMA
- PRICE: 30.840 @ 08:02 GMT Nov 13
- SUP 1: $29.680 - 61.8% retracement of the Aug 8 - Oct 23 bull cycle
- SUP 2: $28.446 - 76.4% retracement of the Aug 8 - Oct 23 bull cycle
- SUP 3: $27.686 - Low Sep 6
- SUP 4: $26.451 - Low Aug 8
Bullish conditions in Silver remain intact and the bear cycle that started on Oct 23 is considered corrective - for now. However this corrective cycle remains in play and the metal continues to weaken. Price has breached the 20- and 50-day EMAs, and pierced $30.504, a trendline support. A clear break would expose $29.680, a Fibonacci retracement. For bulls, a reversal higher would refocus attention on $34.903, the Oct 23 high and bull trigger.
STIR: 31bps of ECB Easing Priced Through December
ECB-dated OIS is little changed on the day, with 30bps of easing priced through the December meeting and 135bps of cuts priced through September 2025. The negative growth implications of US President Trump’s preferred trade policies remain the primary driver of the dovish near-term repricing seen following the US election.
- Euribor futures are -1.0 to -5.0 ticks through the blues versus yesterday’s settlement, after core FI weakened into the close.
- Yesterday evening, ECB’s Kazaks re-iterated his view that rates will need to be lowered “step by step”, while noted that US tariffs could push up inflation and weaken growth. However, he highlighted that it remains uncertain on what policies will actually be implemented, and warned against trade war escalation.
- Today’s regional data/speaker calendar is light, leaving focus on the US CPI report at 1330GMT/1430CET.
| Meeting Date | ESTR ECB-Dated OIS (%) | Difference Vs. Current Effective ESTR Rate (bp) |
| Dec-24 | 2.86 | -30.3 |
| Jan-25 | 2.53 | -63.3 |
| Mar-25 | 2.238 | -92.5 |
| Apr-25 | 2.059 | -110.4 |
| Jun-25 | 1.927 | -123.6 |
| Jul-25 | 1.862 | -130.2 |
| Sep-25 | 1.813 | -135.0 |
| Oct-25 | 1.793 | -137.0 |
| Source: MNI/Bloomberg. | ||
