NORWAY: Pay Growth Important To Determine If 2x25bp H2 Cuts Can Be Delivered

• RES 4: 93.41 High Jul 2      
• RES 3: 93.00 Round number resistance      
• RES 2: 92.79 High Jul 4  
• RES 1: 92.22/24 20-day EMA / HIgh Jul 15
• PRICE: 91.36 @ 08:12 BST Jul 16 
• SUP 1: 91.25 Intraday low   
• SUP 2: 91.16 Low Jun 2
• SUP 3: 90.97 76.4% retracement of the May 22 - Jul 1 bull leg    
• SUP 4: 90.59 Low May 29        

A bear cycle in Gilt futures remains in play and Tuesday’s volatile bearish session reinforces this theme. The contract has recently breached support at 91.63, the Jul 2 low. Price has also traded through 91.50, the 61.8% retracement of the May 22 - Jul 1 bull leg. The move down exposes 90.97, the 76.4% retracement point. Clearance of this level would strengthen a bearish theme. Initial firm resistance is at 92.29, the 20-day EMA.

• RES 4: $40.285 - 1.618 proj of the Apr 7 - 25 - May 15 swing
• RES 3: $40.000 - Psychological round number 
• RES 2: $39.655 - 1.500 proj of the Apr 7 - 25 - May 15 swing
• RES 1: $39.132 - High Jul 14     
• PRICE: $37.9133 @ 08:15 BST Jul 16  
• SUP 1: $36.750 - 20-day EMA
• SUP 2: $35.531 - 50-day EMA 
• SUP 3: $33.967 - Low Jun 3 
• SUP 4: $32.615 - Low May 22 

Trend conditions in Silver are unchanged, a strong impulsive bull cycle remains intact and recent gains reinforce current conditions. The metal on Jul 11 cleared key short-term resistance at $37.317, the Jun 18 high. This confirms a resumption of the uptrend and sights are on the $39.655 next, a Fibonacci projection. On the downside, initial support to watch lies at $36.750, the 20-day EMA.

Citi recommend a SONIA 3m 10s30s conditional bull steepener in costless format.

• They highlight ongoing macro and fiscal uncertainty as the driver of this view.
• They look to “take advantage of the (slightly) negative forward-spot roll as well as the positive vol pick-up to forwards to establish 10s30s steepeners via receivers. The curve’s positive carry should also prove valuable in a scenario where the BoE delivers just (or less than) what’s priced in, keeping rate volatility in check”.