OIL: Risk of Disruption to Russian Baltic Flows from Danish Checks

• RES 4: 1.3789 High Jul 1 and key resistance   
• RES 3: 1.3753 High Jul 2
• RES 2: 1.3681 High Jul 4
• RES 1: 1.3643 Intraday high 
• PRICE: 1.3639 @ 10:32 BST Sep 16
• SUP 1: 1.3510 20-day EMA
• SUP 2: 1.3480/3430 50-day EMA / Low Sep 5
• SUP 3: 1.1.3333 Low Sep 3 
• SUP 4: 1.3142 Low Aug 1 and a key support      

A bullish theme in GBPUSD remains intact and price is trading higher this week. The pair has traded through resistance at 1.3595, the Aug 14 high and a bull trigger. The break strengthens bullish conditions and opens 1.3681 next, the Jul 4 high. Initial support to watch is 1.3480, the 50-day EMA. A clear breach of the EMA would highlight a potential reversal and signal scope for a deeper retracement.

{GB} GILTS: Soft demand at the latest 15-Year auction sees gilts away from session highs.

• Futures back to ~91.50.
• A bullish cycle remains in play. Initial resistance at 91.82. Initial support at 90.65.
• Yields 1.5bp higher to 0.5bp lower, curve twist flattens.
• Modest hawkish adjustment in GBP STIRs, SONIA futures flat to -1.0, BoE-dated OIS pricing ~7.5bp of cuts through year-end, aided by the qauntiy side of the labour market readings.
• We don’t think this morning’s data will be gamechanger for the BoE, particularly with wage data slightly softer than expected at this early stage in the Q3 cycle (see our earlier run of post-data bullets for more colour).
• A reminder that we have CPI data tomorrow ahead of the BoE decision on Thursday (full CPI preview here).
• Focus following Thursday’s BoE decision is likely to fall on the QT announcement for 25/26, with consensus looking for no change in Bank Rate.
• We argue that either active gilt sales continuing at their current pace or being suspended completely would be the optimal position for the market.
• U.S. President Trump’s state visit is set to provide headlines over the next 48 hours, with U.S. firms outlining increased investment intentions re: the UK in recent days.