COMMODITIES: Recent Gains in Gold Still Deemed Corrective
The trend structure in WTI futures remains bullish and Wednesday's rally reinforces current conditions. The recent strong impulsive rally has resulted in a breach of $76.41, the Oct 8 high. Note too that $80.14, the Apr 12 ‘24 high has been pierced, strengthening the bullish theme. Sights are on $81.69, a Fibonacci projection. On the downside, a reversal lower would expose the 20-day EMA, at $73.81, a key short-term support. Recent gains in Gold appear corrective - for now. However, the yellow metal continues to hold on to its latest gains and scope is seen for a continuation higher near-term. The stronger recovery exposes $2726.2, the Dec 12 high and an important resistance. Clearance of this level would be a bullish development. On the downside, a reversal lower would expose $2583.6, the Dec 19 low. Initial support is at $2649.0, the 50-day EMA.
- WTI Crude up $0.1 or +0.13% at $78.83
- Natural Gas down $0.13 or -2.94% at $4.131
- Gold spot down $7.68 or -0.28% at $2706.51
- Copper up $0.4 or +0.09% at $444.5
- Silver down $0.32 or -1.05% at $30.4889
- Platinum up $4.88 or +0.52% at $940.72
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
BONDS: Ticking Lower
Core global FI markets tick lower over the last hour or so.
- Contained uptick in oil probably a factor here, EUR 5y5y inflation-linked swaps +2bp or so on the day unwinding some of yesterday’s ~3bp downtick.
- Nothing in the way of particularly hawkish commentary from ECB chief economist Lane at the MNI event, so that hasn’t been a factor.
- Most participants are probably unwilling to take on fresh positions given the time of year and impending run of central bank decisions, meaning it won’t take much to move markets.
- German yields -1.5bp to +2.5bp, curve twist flattens.
- EGB spreads to Bunds little changed to 1bp wider.
- Tsys and gilts both ~1bp narrower to Bunds.
- Gilts unwind most of the initial CPI driven bid, futures test yesterday’s low.
ECB: Q&A With Chief Economist Lane at MNI Event Has Started
The Q&A with Chief Economist Lane has started. Asked how long the ECB is likely to continue with the current meeting-by-meeting and data dependent approach:
- Lane notes that the meaning of what has been decided on a meeting by meeting and data dependent approach has changed through the course of the post-covid rate cycle.
- Looking ahead, the concept of “meeting-by-meeting” will be more based on an assessment of the risk outlook, given the uncertainty currently present.
- This rhetoric is broadly in line with the themes in Lane’s interview on December 2.
EQUITIES: Estoxx Put Spread
SX5E (21st Mar) 3800/3200ps 1x2, bought for 2.2 in 5k.
