EQUITIES: Thursday's Sell-Off in E-Mini S&P Appears Corrective
A medium-term bull trend in Eurostoxx 50 futures remains intact and this week’s gains reinforce bullish conditions. Note that the sharp pullback Thursday appears to be a correction - for now. A resumption of gains would signal scope for a climb towards 5853.50 next, the top of a bull channel drawn from the Aug 1 low. On the downside, initial firm support is seen at 5676.84, the 20-day EMA. The trend condition in S&P E-Minis remains bullish and Thursday’s selloff appears corrective - for now. Attention is on support at the 50-day EMA, at 6729.38. A clear break of the EMA, and of support at 6655.50, the Nov 7 low, would highlight a short-term reversal and signal scope for a deeper correction. Initial firm resistance to watch is 6900.50, the Nov 12 high. A breach of this hurdle would be a bullish development.
- Japan's NIKKEI closed lower by 905.3 pts or -1.77% at 50376.53 and the TOPIX ended 21.91 pts lower or -0.65% at 3359.81.
- Elsewhere, in China the SHANGHAI closed lower by 39.009 pts or -0.97% at 3990.492 and the HANG SENG ended 500.57 pts lower or -1.85% at 26572.46.
- Across Europe, Germany's DAX trades lower by 199.62 pts or -0.83% at 23843.22, FTSE 100 lower by 116.34 pts or -1.19% at 9690, CAC 40 down 65.25 pts or -0.79% at 8167.24 and Euro Stoxx 50 down 53.18 pts or -0.93% at 5689.61.
- Dow Jones mini down 89 pts or -0.19% at 47460, S&P 500 mini down 23.25 pts or -0.34% at 6737.5, NASDAQ mini down 157.25 pts or -0.63% at 24938.5.
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EQUITIES: Large Estoxx Option Flows
- SX5E (19th Dec) 4400p, trades 10.80 and 11.00 in 44k.
- SX5E (20th Mar) 4800p, trades 58 in 33k.
- SX5E (18/12/26) 5600^, trades for 770.8 in 15k.
GERMAN AUCTION RESULTS: 30-Year Bunds
| 0% Aug-50 Bund | 2.90% Aug-56 Bund | |
| ISIN | DE0001102481 | DE000BU2D012 |
| Total sold | E1bln | E1.5bln |
| Allotted | E757mln | E1.182bln |
| Previous | E822mln | E1.13bln |
| Avg yield | 3.14% | 3.17% |
| Previous | 3.04% | 3.25% |
| Bid-to-offer | 1.53x | 1.11x |
| Previous | 2.28x | 1.37x |
| Bid-to-cover | 2.02x | 1.40x |
| Previous | 2.78x | 1.82x |
| Avg Price | 46.43 | 94.74 |
| Low Price | 46.41 | 94.74 |
| Pre-auction mid | 46.374 | 94.631 |
| Prev avg price | 46.78 | 93.27 |
| Prev low price | 46.74 | 93.27 |
| Prev mid-price | 46.729 | 93.156 |
| Previous date | 19-Mar-25 | 17-Sep-25 |
GILTS: Firmer On Global Cues
Gilts have rallied, largely on spillover from wider core global FI markets.
- The reduction of short-term French political risks and late Tuesday comments from Fed Chair Powell (pointing to further rate cuts and the potential for the end of QT in the coming months) have provided the support.
- Gilts outperform swaps following Powell’s comments.
- Futures trade as high 92.41 before fading to 92.27 last.
- Fresh extension higher would target projection resistance (92.72).
- Yields 3-4bp lower across the curve, wings underperform.
- 10s pierced support at the August 11 low (4.548%). Uptrend support drawn from the Dec ’24 low was also tested (4.536%). The next level of note below there is the August low (4.496%), which equates to 92.73 in futures today.
- 30s have broken through uptrend support drawn off the April low (5.370%) and trade ~5bp above their August low (5.309%).
- This morning’s I/L supply saw a solid cover ratio (~3.5x), but pricing was on the soft side.
- The rally further out the curve has allowed yesterday’s dovish move in GBP STIRs to extend.
- SONIA futures flat to +3.0.
- BoE-dated OIS pricing ~10bp of easing through year-end.
- BoE’s Ramsden didn’t touch on monetary policy in his morning address.
- Fellow Deputy Governor Breeden is unlikely to cover monetary policy when she speaks later.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA (bp) |
Nov-25 | 3.944 | -2.4 |
Dec-25 | 3.870 | -9.7 |
Feb-26 | 3.733 | -23.4 |
Mar-26 | 3.690 | -27.8 |
Apr-26 | 3.590 | -37.8 |
Jun-26 | 3.558 | -40.9 |
Jul-26 | 3.500 | -46.7 |
Sep-26 | 3.484 | -48.3 |
