POWER: Polish Grenevia Receives Grant for 130MWh BESS Projects

OI data suggests that yesterday’s sell off in gilt futures only managed to generate a fairly modest round of net long cover (as OI fell by ~10K or ~0.8%) during the sell off that was mostly driven by spillover from the hawkish repricing in the EUR front end.

• OI is now ~21K higher than pre-Budget levels or a mere ~1.8K contracts, which is hardly indicative of high conviction gilt longs despite the market deeming Chancellor Reeves’ budget to be credible and with curve flattening aided by the DMO continuing to skew issuance further away from the long end.

FX Exchange (CME) traded roll pace, expiry Monday: The EUR was the most active into the European session.

• EUR: 34%.
• GBP: 39% (above pace).
• JPY: 45% (above pace).
• CHF: 37% (above pace).
• CAD: 21% (below pace).
• AUD: 45% (above pace).
• NZD: 31%.
• SEK: 46% (above pace).
• NOK: 39% (above pace).

Johnson Redbook Retail Sales continued to post solid growth into December, with the week ending December 6 (and therefore the month-to-date) seeing 5.7% Y/Y expansion. This follows 6.4% sales in November.

• We'll only get October Census Bureau retail sales data out on Dec 16 due to federal government shutdown postponements, but since September Redbook has been averaging 5.8% Y/Y growth - suggesting continued solid dynamics even if only in nominal terms.
• Final Chicago Fed CARTS ex-autos retail sales data for November is due out Dec 19; the prelim release showed +0.4% M/M expansion, or 0.3% in inflation-adjusted terms.
• The report notes dynamics at play ahead of the key holiday retail season: "Retailers noted that the week following the busy post-Thanksgiving period is typically quiet, as is the first week of December. They pointed out that this quiet phase is usually followed by a gradual increase in sales leading up to Christmas. To entice shoppers, online retailers extended their Cyber Monday promotions. The growing popularity of gift cards and e-gift cards has made it easier for consumers to delay their holiday shopping, resulting in some sales being pushed until after the holiday season. Additionally, some retailers offered discounts on gift cards, allowing shoppers to purchase them in bulk or keep them for personal use. December often experiences an imbalance, with a large portion of sales occurring in the week before Christmas. This trend has intensified as customers increasingly shop at the last minute to take advantage of merchants' markdowns."