OUTLOOK: Price Signal Summary - Bull Cycle In Gilts Remain Intact

• In the FI space, a primary bull cycle in Bund futures remains intact and short-term weakness is considered corrective. However, the contract maintains a softer tone and has traded through support at the 50-day EMA, at 130.61. This signals scope for a deeper retracement and today’s extension strengthens the current bearish threat. A continuation lower would open 129.28, 50.0% of the Mar 11 - Apr 7 rally. Initial resistance to watch is 130.96, the 20-day EMA.
• The latest pullback in Gilt futures appears corrective. However, the contract has traded through support at the 50-day EMA, at 92.52. The breach signals scope for a deeper retracement and today’s move down has resulted in a print below 91.73, the Apr 17 low. An extension of the bear leg would expose 91.43, the Apr 15 low. Initial resistance is seen at 92.76, the 20-day EMA. A break of this hurdle would ease bearish pressure.

Greene asked if can describe inflation as transitory:

A: "I'll just highlight that I rolled out our three inflation persistence indicators for a reason, because I think they're generally still looking too high. They're moving in the right direction and focused on kind of concerns around supply constraints in the economy. So I don't think that we can kind of pull out the ticker tape and suggest that it's transitory. I think there are still reasons to to be concerned about inflation persistence, and to consider that, you know, inflation persistence has come down in part because of our monetary policy stance."

Q: Should QT be paused or altered in particularly volatile times like was seen recently with the long/short maturity auctions timings.

A: "So there is a knockout clause in our Qt which says, effectively, if QT is actually distorting the markets... So it could be more volatility. It could be bigger moves. But generally... if we thought QT was distorting the markets, then we rethink QT that's baked into our QT programme, which isn't the case for all central banks. But you know, you're raising this in the context of having swapped some of our QT operations and that that was purely operational. So it doesn't change the total amount, it doesn't change the angle, it doesn't change kind of the equilibrium level. of reserves, it was purely operational"