UK DATA: Public finance data balanced out by revisions
- Public finance data looks a little better than both consensus and OBR forecasts for the month of July with PSNBex GBP1.1bln on the month (consensus GBP2.0bln). However, this is entirely balanced out by a GBP1.1bln revision to the cumulative Apr-Jun numbers.
- All in all, at first glance the accrual based numbers therefore don't seem to move the needle much.
- The date of the Budget has still not been set (November looking likely) and we are likely to get at least one and an outside chance of two more updates incorporated in OBR forecasts before then (and likely 3 updates seen by the market).
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BTP TECHS: (U5) Trend Needle Points North
- RES 4: 122.71 2.764proj of the May 14 - 20 - 21 price swing
- RES 3: 122.35 2.500 proj of the May 14 - 20 - 21 price swing
- RES 2: 122.00 Round number resistance
- RES 1: 121.22/121.73 20-day EMA / High Jun 13 and the bull trigger
- PRICE: 121.20 @ Close Jul 21
- SUP 1: 119.84 Low Jul 14 and key short-term support
- SUP 2: 119.48 Low May 26
- SUP 3: 118.87 Low May 21
- SUP 4: 118.51 Low May 14 and key support
The primary trend condition in BTP futures is unchanged, it remains bullish. Monday’s strong rally reinforces this theme. Key short-term support has been defined at 119.84, the Jul 14 low. A break of this level is required to reinstate a short-term bearish threat. On the upside, resistance and the bull trigger to watch is 121.73, the Jun 13 high. Clearance of this level would resume the uptrend.
MNI: UK JUN PSNCR GBP-16.11 BN
- MNI: UK JUN PSNCR GBP-16.11 BN
- UK JUN CGNCR GBP15.68 BN
- UK JUN PSNB-X GBP+20.68 BN
- UK JUN PSNB GBP+20.68 BN
GILT TECHS: (U5) Corrective Bounce
- RES 4: 93.41 High Jul 2
- RES 3: 93.00 Round number resistance
- RES 2: 92.79 High Jul 4
- RES 1: 91.97/92.24 20-day EMA / HIgh Jul 15
- PRICE: 91.78 @ Close Jul 21
- SUP 1: 91.08 Low Jul 18
- SUP 2: 90.97 76.4% retracement of the May 22 - Jul 1 bull leg
- SUP 3: 90.59 Low May 29
- SUP 4: 90.46 Low May 23
A bear cycle in Gilt futures remains in play and for now, Monday’s strong gains are considered corrective. Recent weakness resulted in a break of 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 91.97, the 20-day EMA.
