UK DMO UPDATE: No guidance for next week's tenders in the consultation
- The DMO will be holding two PGTs (programmatic gilt tenders) next week: a conventional on Tuesday 18 November and a linker on Thursday 20 November.
- There is no guidance in the call for consultation responses as to specific maturity segments under consideration or whether the tenders will see one or two gilts on offer.
- The DMO will announce the gilts on offer at 7:30GMT tomorrow.
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EGB OPTIONS: Bund Call Spread seller
RXX5 129.00/129.50cs, sold at 34 in 5k.
GILT TECHS: (Z5) Bullish Theme
- RES 4: 92.84 High Aug 5 (cont) and a key resistance
- RES 3: 92.37 High Aug 11 (cont)
- RES 2: 92.06 High Aug 14
- RES 1: 91.82 High Sep 24 and a key resistance
- PRICE: 91.68 @ 08:22 BST Oct 14
- SUP 1: 90.90 20-day EMA
- SUP 2: 90.26/89.94 Low Sep 26 / 76.4% of the Sep 3 - 11 correction
- SUP 3: 89.36 Low Sep 3 and a key support
- SUP 4: 89.00 Round number support
Gilt futures rallied sharply higher on Friday confirming a resumption of the recovery that started Sep 25. Today’s gap higher strengthens current conditions and price is approaching resistance at 91.82, the Sep 24 high. A clear break of this hurdle would strengthen bullish conditions and open the 92.00 handle. Price needs to trade below support at 90.26, the Sep 26 low, to reinstate a bearish theme. First support lies at 90.90, the 20-day EMA.
EGBS: Bond Volumes Pick Up Through the Open, Yields Under Further Pressure
A notable pick up in volumes across assets, selling equities to buy safer haven bonds on China retaliation against the US and the broader world. Bunds are bought in 8k with some similar heavy volumes in Tnotes. 30k lots went through in an 8 minute window, with the price now just off its high.
- Noted last week that near term risk for French OATs was to the upside as the contract eyed some interesting yield levels. The French 10yr Yield is now below 3.45%, next downside comes at 3.40% (September Low).
- Today, reference 122.32: 3.40% = 122.70.
