BUNDS: Safer Haven flows underpin the German Bund

• The German Bund unwinds some of Yesterday's rally triggered by the fall in Oil with WTI falling to a 8 sessions lows Yesterday.
• November WTI (CLX6) has recovered $2.37 from Yesterday's low on profit taking, with no real new trigger for the move lower in Oil aside from an uptick in traffic.
• Risk for Yields going forward are unchanged and to the upside.
• For the German 10yr Bund, support will be eyed at the 120.55/120.49 gap.
• Resistance moves up to 121.40 which could closely match the 3.40% Yield level, although will update when they are quoted.
• There are no Tier 1 data out of Europe and the US Weekly ADP is no longer a Market mover. Focus is squarely on the Middle East to drive Multi Cross Assets.
• SUPPLY: UK sells £4.75bn 6yr (equates to 23.8k Gilt) should weigh into the bidding deadline. Germany €5bn 5yr (equates to 43.65k Bobl) will weigh on the contract. US sells $69bn of 2yr Notes (should weigh into that part of the curve).
• SPEAKERS: ECB Kaasik, Nagel, Kocher, Lagarde, Sleijpen, Simkus, Fed Williams, Jefferson, Barkin.

• RES 4: $110.00 - Round number support 
• RES 3: $109.57 - 2.236 proj of the Jul 2 - 23 - Aug 5 price swing
• RES 2: $107.10 - 76.4% retracement of the Mar - Jul bear (cont)
• RES 1: $105.61 - 2.000 proj of the Jul 2 - 23 - Aug 5 price swing
• PRICE: $93.69 @ 07:05 BST Sep 22
• SUP 1: $91.36 - 20-day EMA   
• SUP 2: $85.52 - 50-day EMA 
• SUP 3: $72.05 - Low Aug 5 and a key support 
• SUP 4: $67.09 - Low Jul 2 and the bear trigger

A bull cycle in WTI futures remains intact and the latest pullback appears corrective - for now. Note that moving average studies are in a bull-mode position and this continues to highlight a dominant uptrend. The contract has also tested above $100.00, a bullish development. Sights are on the $105.61, a Fibonacci projection. Initial support is at $91.36, the 20-day EMA. Note that the trend is overbought, a deeper correction would unwind this condition.

• Looking first glance at the public finance data, August PSNBex missed consensus expectations by about GBP 3bln.
• There were also upward revisions to PSNBex in the fiscal year to July from GBP56.7bln to GBP59.0bln.
• This overall leaves PSNBex in the fiscal year to August at GBP77.3bln and this is now GBP8.1bln higher than the OBR forecast (versus GBP2.3bln higher than forecast in the pre-revision fiscal year to July).
• We are looking into the details now, but at first glance this is disappointing for the government. However, we aren't sure on how much of the numbers in here will have reached the OBR before their cut-off to be included in their pre-policy forecasts.