COMMODITIES: Trend Condition in WTI Futures Remains Bearish
The trend condition in WTI futures remains bearish and gains are considered corrective - for now. MA studies are in a bear-mode position, highlighting a dominant downtrend. A key support and the bear trigger at $56.11, the Oct 17 low, has recently been breached. The break highlights a continuation of the downtrend and opens $53.77, a Fibonacci projection. Key S/T resistance is $61.25, the Oct 24 high. First resistance is at $58.56, the 50- day EMA. The trend structure in Gold is unchanged, it remains bullish and the sharp sell-off earlier this week appears corrective - for now. The trend is overbought and a deeper retracement would allow this condition to unwind. First support at $4324.8, the 20-day EMA, has been pierced. A clear break of the average would expose the 50-day EMA at $4183.5. For bulls, a resumption of gains would open $4578.3, a Fibonacci projection.
- WTI Crude down $0.23 or -0.4% at $57.17
- Natural Gas down $0.08 or -2.09% at $3.609
- Gold spot up $68.16 or +1.58% at $4388.51
- Copper up $4.75 or +0.84% at $572.95
- Silver up $2.8 or +3.91% at $74.5023
- Platinum up $68.89 or +3.34% at $2130.63
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EGBS: BTPs Outperform After PMIs, OATs Consolidate Tuesday Widening
EGB spreads vs. Bunds little changed to 1bp tighter this morning, with BTPs outperforming.
- The 10-Year BTP/Bund spread threatens to break below 70bp, a level that has not been closed below since January ’10.
- Firmer than-expected Italian PMI data has factored into BTP outperformance.
- OATs consolidate yesterday’s widening (trading out to 74bp vs. Bunds). A reminder that yesterday’s underperformance in French paper was largely driven by local media reports suggesting that the centre-right Horizons, which sits as part of the governing coalition, will not back the draft Social Security Finance Bill (PLFSS) in the 9 December vote. That vote will prove crucial for the future of PM Sebastien Lecornu's administration.
GBP: EURGBP Firmly Rejects 0.88 on Flattering PMI
GBP edges to a new high and through yesterday's 1.3275 on the better-than-expected PMI print; futures markets see some interest on the move, prompting the best volumes of the day. Prices are now meeting an uptrendline drawn off the Nov13 high on the 15min candle chart - meaning further strength here could trigger more on the followthrough.
- Mirroring the move, EURGBP has firmly rejected the test of 0.88 overnight, erasing the majority of Monday's rally. This works against the bullish trend set-up in the cross - and this spell of weakness appears corrective until a close below the 50-day EMA, currently at 0.8755.
GILTS: Front End & Belly Holds Lower Ahead Of Supply, No Reaction To PMI
Yields 1.5bp higher to 0.5bp lower, curve flatter, with little reaction to the firmer-than-expected final services PMI data. Presence of the impending GBP4.75bln 4.00% May-29 gilt auction likely weighing on the front end/belly.
