GILTS: Off Highs After Bulls Fail To Close Gap In Futures
Gilts have drawn spillover support from the rally in Tsys, stemming from a U.S.-NATO agreement re: Greenland, with the lower-than-expected borrowing requirement revealed within the latest round of PSNB data providing further tailwinds.
- Gilt futures +25 at 91.98 vs. session highs of 92.13.
- This week’s price action has countered some of the bullish technical theme in the contract.
- Bulls will want to close Tuesday’s opening gap lower (92.16), which protects more meaningful resistance at Monday’s top (92.51). Initial support is located at Tuesday’s low (91.21).
- Yields 1-4bp lower, curve flatter.
- 10s last ~4.43%, initial areas of note are located at triangle support (4.35% today) and psychological resistance (4.50%).
- GBP STIRs are little changed on the day, BoE-dated OIS shows ~43bp of easing for the current cycle, with the next 25bp step fully discounted come the end of the June MPC (80% discounted through April).
- Retail sales and flash PMI data are due tomorrow. The labour market developments in the latter will be scrutinised given the recent slowdown and spillover into BoE decision making. Still, the BoE’s own surveys provide more meaningful inputs for the Bank.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA (bp) |
Feb-26 | 3.727 | +0.3 |
Mar-26 | 3.657 | -6.7 |
Apr-26 | 3.518 | -20.6 |
Jun-26 | 3.440 | -28.4 |
Jul-26 | 3.356 | -36.8 |
Sep-26 | 3.330 | -39.4 |
Nov-26 | 3.293 | -43.1 |
Dec-26 | 3.300 | -42.4 |
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GREECE T-BILL AUCTION RESULTS: 26-Week GTB
| Type | 26-week GTB |
| Maturity | Jun 26, 2026 |
| Amount | E400mln |
| Target | E400mln |
| Previous | E500mln |
| Avg yield | 2.01% |
| Previous | 1.78% |
| Bid-to-cover | 1.80x |
| Previous | 1.84x |
| Previous date | Nov 26, 2025 |
FOREX: USDJPY Pullback Extends to Over 200 Pips
- The Japanese yen rebound has gathered pace on Tuesday, helping USDJPY extending its pullback from the post BOJ highs to over 200 pips. Katayama’s more forceful warning on intervention, alongside PM Takaichi stating she will not implement irresponsible tax cuts or bond issuance have provided a supportive yen backdrop.
- Price action this morning has shown no signs of actual intervention, with the latest leg lower more likely a result of moving back through the BOJ press conference lows at 155.85. Given the volatile moves in recent sessions, the most notable support lies further out at 154.40, the 50-day EMA. A clear breach of it would undermine the bull theme and signal scope for a deeper corrective pullback.
- Broader dollar weakness (a DXY close below 98.00 would be the first since early October) has kept upward pressure on EURUSD, which is narrowing in on the 1.18 handle, while GBPUSD has notably rallied above 1.35, edging closer to 1.3527, the Oct 1 high.
- Meanwhile, AUD and NZD continue to be well supported by positive equity sentiment, with NZD actually top of the G10 leaderboard Tuesday. NZDUSD traded through the 0.5831 Dec 11 highs, and a break above 0.5845 would mean the highest levels since September. RBA minutes showed that the board did discuss the circumstances under which it would have to pivot to interest-rate hikes in 2026 as inflation risks shift to the upside. This led AUDUSD to narrow the gap to key resistance at 0.6707, the Sep 17 high.
- Q3 US GDP highlights the data calendar for today, potentially key to the USD narrative as we approach the holiday period. US October durable goods orders / industrial production, Philly Fed Non-Manufacturing, Redbook retail sales and Canada monthly GDP are also on the calendar.
COMMODITIES: Fresh Cycle Highs for Gold Reinforce Bullish Conditions
The trend condition in WTI futures remains bearish and short-term gains are considered corrective. MA studies are in a bear-mode position, highlighting a dominant downtrend. A key support and the bear trigger at $56.11, the Oct 17 low, has been breached. Clearance of this level resumes the downtrend and opens $53.77, a Fibonacci projection. Key short-term resistance to watch is $61.25, the Oct 24 high. First resistance is at $58.71, the 50- day EMA. The trend structure in Gold is unchanged, it remains bullish and another fresh cycle high reinforces current conditions. The break higher confirms a resumption of the primary uptrend. The metal has traded through the psychological $4400.0 handle and this opens $4500.0 next, ahead of $4536.0, a Fibonacci projection. Initial firm support to watch lies at $4259.9, the 20-day EMA. A pullback would be considered corrective.
- WTI Crude up $0.02 or +0.03% at $58.05
- Natural Gas up $0.01 or +0.35% at $3.979
- Gold spot up $39.53 or +0.89% at $4483.5
- Copper up $3.4 or +0.62% at $554.35
- Silver up $0.52 or +0.75% at $69.5745
- Platinum up $50.94 or +2.39% at $2181.47
