IRAN: Tehran Confirms Foreign Min To Hold Call w/E3 Counterparts Today
The Iranian Foreign Ministry has confirmed earlier reports that Foreign Minister Abbas Araghchi will hold a phone call with his counterparts from the E3 nations (France, Germany, the UK) as well as European Commission High Representative for Foreign Affairs and Security Policy Kaja Kallas later today (Wednesday, 17 Sep).
- Iran Nuances: "The call could be a crucial, if not final, opportunity for diplomacy to defuse a crisis [spiralling] from the potential reimposition of UN sanctions, [...]. The primary goal of the conversation is to prevent what the source described as an “unnecessary escalation,” which they warned would be an “inevitable outcome” if the so-called “snapback” mechanism is activated."
- Following the E3 initiating snapback sanction proceedings against Iran on 28 August, the UN Security Council has 30 days (setting a 27 Sep deadline) to decide on whether to maintain relief on sanctions or let this expire.
- The agreement last week between Iran and the International Atomic Energy Agency (IAEA), described by Foreign Policy as "less-than-meets-the-eye", ostensibly gives IAEA inspectors access to Iranian nuclear facilities. However, there is no timeline for visiting key sites at Isfahan, Natanz and Fordow, significantly weakening the provisions of the agreement.
- The E3 has made three demands (allow UN inspectors, confirm location of stock of enriched uranium, engage in UN talks) to delay snapback sanctions for six months. Tehran likely to view the price (particularly the second demand) as too high for just six months of relief.
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Historical bullets
GILTS: Bull Flattening After Friday's Bear Steepening
Gilts follow peers away from Friday’s late lows, curve flattening.
- Little in the way of concrete drivers apparent (similar to much of Friday’s bear steepening, with ongoing focus on fiscal/issuance outlooks and Dutch pension reform noted back then).
- More broadly, there wasn’t much in the way of concrete process at the Trump-Putin summit, with Trump set to meet with his Ukrainian counterpart later today.
- Futures as high as 91.23 after trading 90.91 on Friday.
- Still, bears remain in technical control. Fresh extension lower would target the May 29 low (90.59).
- Conversely, bulls need to clear the 50-day EMA (92.05). Clearance of this average is required to highlight a potential reversal.
- Yields 2.5-3.5bp lower.
- The early June high in 10-Year yields (3.702%) remains intact.
- A reminder that 50s registered a fresh cycle high on Friday, but bears failed to force a test of 5.00%.
- 2s10s hovers around 75bp, failing to test July highs around the 80bp mark.
- 5s30s registered a fresh cycle closing high on Friday, printing the highest level seen since ’17 and exposing the 150bp level (last 146.6bp).
- Light dovish moves in GBP STIRs since the pre-gilt open bullet.
- SONIA futures flat to +2.0 on the day.
- Wednesday’s CPI data headlines the domestic calendar this week, see our morning STIR bullet for more colour on that front and expect our usual detailed preview in due course.
- BoE-dated OIS prices 14bp of easing through December and 24.5bp of cuts through February.
SILVER TECHS: Bullish Theme Still In Play
- RES 4: $41.064 - 1.764 proj of the Apr 7 - 25 - May 15 swing
- RES 3: $40.285 - 1.618 proj of the Apr 7 - 25 - May 15 swing
- RES 2: $40.000 - Psychological round number
- RES 1: $39.655 - 1.500 proj of the Apr 7 - 25 - May 15 swing
- PRICE: $38.081 @ 08:38 BST Aug 18
- SUP 1: $36.216 - Low Jul 31
- SUP 2: $35.285 - Low Jun 24
- SUP 3: $33.940 - 50.0% retracement of the Apr 7 - Jul 23 bull leg
- SUP 4: $32.958 - Low Jun 2
Trend signals in Silver remain bullish. The pullback off the late July highs is considered corrective - particularly as prices have recovered off support at the 50-day EMA, now at $37.038. A clear break of it is needed to strengthen a short-term bearish threat and allow for a deeper retracement. This would open $35.285, the Jun 24 low. For bulls, a resumption of gains would refocus attention on the next objective at $39.655 a Fibonacci projection.
GOLD TECHS: In A Range
- RES 4: $3547.9 - 1.764 proj of the Feb 28 - Apr 3 - Apr 7 price swing
- RES 3: $3500.1 - High Apr 22 and bull trigger
- RES 2: $3451.3 - High Jun 16
- RES 1: $3409.2/3439.0 - High Aug 8 / 23
- PRICE: $3351.1 @ 08:33 BST Aug 18
- SUP 1: $3268.2 - Low Jul 30
- SUP 2: $3248.7 - Low Jun 30 and the bear trigger
- SUP 3: $3204.7 - Low May 20
- SUP 4: $3121.0 - Low May 15 and key support
A bull cycle in Gold remains intact and this is highlighted by moving average studies that remain in a bull-mode position. This sideways trend that has been in place since the Apr peak appears to be a corrective phase. A resumption of gains would open $3439.0, the Aug 23 high. Key resistance and the bull trigger is at $3500.1, the Apr 22 low. On the downside, first support to watch lies at $3268.2, the Jul 30 low.
