OUTLOOK: Price Signal Summary - Monitoring Resistance In Bunds
Oct-02 11:26
- In the FI space, Bund futures continue to trade above their recent lows. Recent gains appear corrective. Key support and the bear trigger lies at 127.61, the Sep 3 low. Clearance of this level would cancel a recent bullish theme and confirm a continuation of the medium-term bear cycle. For bulls, a clear reversal higher would refocus attention on key resistance at 129.44, the Sep 10 high. First resistance is 128.84, 61.8% of the Sep 10 - 25 bear leg.
- Gilt futures continue to trade above their latest lows. The move down last week strengthens a bearish theme and does suggest the end of the recent corrective phase between Sep 3 - 11. Note that on the continuation chart, moving average studies are in a bear-mode position, highlighting a dominant downtrend. A resumption of weakness would open 89.94, the 76.4% retracement of the Sep 3 - 11 corrective phase. Initial resistance to watch is 91.28, the Sep 24 high.
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US TSY FUTURES: BLOCK: Dec'25 10Y Buy
Sep-02 11:25
- +5,200 TYZ5 112-04, buy through 112-03.5 post time offer at 0659:37ET, DV01 $340,000.
- The 10Y contract trades 112-04 last (-12).
CROSS ASSET: FTSE, Gilt and the Pound trade in Tandem
Sep-02 11:25
- The FTSE, Gilt and the Pound are still moving together, seeing another round of selling interest but nothing fast.
- Fiscal, Financing, Politic Risk, and Concerns on higher borrowing costs, have push Bond traders to demand higher Yields, and has clearly been the driver.
- Gilt still eye the 4.80% level ( initially, and a break through would open to 89.68 Low Jan 15 (cont) next.
(Chart source: MNI/Bloomberg Finance LP).
GILT SYNDICATION: 4.75% Oct-35 gilt: Priced
Sep-02 11:22
- Reoffer: 98.972 to yield 4.8786%
- Spread set earlier at 4.50% Mar-35 Gilt +8.25bp (guidance was +8.25/+8.75bps)
- Size: GBP14bln (MNI expected GBP8-12bln with risks skewed to the higher end given the large book size)
- Books closed in excess of GBP141bln (inc JLM interest of GBP12bln - second largest ever for a gilt)
- Hedge ratio: 100% vs 4.50% Mar-35 gilt (GB00BT7J0027)
- Maturity: 22 October 2035
- Expected Settlement: 3 September 2025 (T+1)
- Coupon: 4.750% SA, ACT/ACT, long 1st to 22 April 2026
- Benchmark: 4.50% Mar-35 Gilt (ISIN: GB00BT7J0027)
- ISIN: GB00BTXS1K06
- Bookrunners: HSBC / J.P. Morgan (DM/B&D) / Lloyds / Morgan Stanley / NatWest / UBS
From market source and MNI colour
