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• MNI: US NFIB APR SMALL BUSINESS INDEX 95.9

• In the FI space, the trend in Bund futures is unchanged, it remains bearish, highlighted by MA studies that are in a bear mode position signalling a dominant downtrend. Recent gains have exposed resistance at 125.89 (pierced), the 50-day EMA. A clear break of this EMA would signal scope for a stronger correction and open 126.64, the Apr 8 high and key resistance. For bears, key support lies at 124.25, the Mar 27 low.
• A bearish theme in Gilt futures remains intact and the latest recovery has proved to be a correction. Today’s move lower has resulted in a breach of 85.91, the Mar 23 low. A clear break of this support would confirm a resumption of the medium-term downtrend, and open 85.21, a 2.618 projection of the Feb 27 - Mar 3 - 4 price swing. On the upside, key short-term resistance to watch is 88.42 the 50-day EMA. Clearance of this EMA would be a bullish development.

The 10-Year gilt/Bund spread is ~5bp wider on the day at ~201bp, with the move driven by an increase in UK political risk premia, as questions surrounding the future of UK PM Starmer intensify.

• The spread hasn’t closed above 200bp since October.
• Next upside target of note located at the October closing high (204.23bp).

Fig. 1: 10-Year Gilt/Bund Spread (bp)

Source: MNI - Market News/Bloomberg Finance L.P.