OUTLOOK: Price Signal Summary - Bull Cycle In Gilts Intact
Jan-09 12:27
- In the FI space, Bund futures are holding on to this week’s gains. The latest rally does undermine the bear theme and attention is on resistance around the 50-day EMA, at 128.31. A clear break of this average would highlight a stronger reversal and signal scope for a continuation higher, towards 128.75, the Dec 3 high. Key support and the bear trigger is unchanged at 126.75, the Dec 22 low.
- Gilt futures traded sharply higher Wednesday. The contract is through resistance at 91.93, the Nov 27 high. This strengthens a short-term bullish condition and paves the way for a climb towards 92.57, a 1.00 projection of the Nov 19 - 27 - Dec 16 price swing. Initial support is seen at 91.53, the Jan 7 low. Support at the 20-day EMA lies at 91.29. A break of the average would signal a possible reversal.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
US DATA: New Purchase Mortgage Applications Hold Close To Recent High
Dec-10 12:23
New purchase mortgage applications gave back a small part of their recent push higher but continue to offer scope that recent cautious optimism for existing home sales might have continued in the near-term. A resumed tightening in mortgage swap spreads acted as a small tailwind for financing activity.
- MBA composite applications increased 4.8% (sa) last week after -1.4%, a decline that was as part of five consecutive weeks that were either flat or stepped lower.
- Within the details, new purchase applications gave back some of their recent gains albeit with only -2.4% after 2.5%, whilst refis bounced 14.3% after five consecutive declines worth a cumulative -21.5%.
- Composite applications are at 68% of 2019 levels, new purchases at 70% after last week’s 72% had been the highest since Feb 2023, and refis are at 68%.
- The 30Y conforming mortgage rate inched 1bp higher after an 8bp decline the week prior, a move that likely fueled the subsequent uptick in refi activity.
- Mortgage swap spreads saw a notable tightening as steady rates came despite a 9bp increase in the average 10Y swap rate over the week. The 265bp (-8bp) surpasses a recent trough of 267bp for what was its lowest since Apr 2022, having averaged 285bp in Q1 and a rough range of 300 +/-5bp for some months after reciprocal tariff announcements in April prompted more cautious lending standards.
OUTLOOK: Price Signal Summary - Bull Cycle In Gold Remains In Play
Dec-10 12:03
- On the commodity front, Gold is in consolidation mode. The trend condition is unchanged, the set-up remains bullish. The bear phase between Oct 20 and 28 appears to have been a correction and note that the recovery since Oct 28 signals the end of that corrective cycle. Key support to watch is the 50-day EMA, at $4044.0. Clearance of this EMA would signal scope for a deeper retracement. Sights are on key resistance and the bull trigger at $4381.5, the Oct 20 high.
- Short-term gains in WTI futures appear corrective - for now - and a bear threat remains present. Note that moving average studies are in a bear-mode position, highlighting a dominant downtrend. A stronger resumption of the bear leg would open key support and the bear trigger at $55.99, the Oct 20 low. Clearance of this level would resume the downtrend. Key short-term resistance to watch is $61.84, the Oct 24 high.
MNI: BRAZIL NOV FINAL IPCA +0.18% M/M
Dec-10 12:00
- MNI: BRAZIL NOV FINAL IPCA +0.18% M/M
