OIL: *US TOOK LAW ENFORCEMENT ACTION ON SHIP NEAR VENEZUELA: OFFICIAL

European curves flattened Monday.

• An apparent breakthrough in the US federal government shutdown over the weekend saw core instruments on the back foot early.
• But the rise in yields at the open would mark the highs for the day in Bunds and Gilts, with a fairly steady descent throughout the rest of the session.
• This was mainly following the trajectory of Treasuries paring losses as opposed to European macro/headline cues, though Bunds and Gilts would outperform their US counterparts on the day.
• UK Chancellor Reeves made the clearest indications yet that the government would break manifesto pledges not to raise income/NIC/VAT taxes.
• Periphery/semi-core EGBs outperformed alongside a risk-on rally in equities, with BTPs and OATs spreads tightening most.
• The German and UK curves both twist flattened, with Bunds slightly underperforming Gilts.
• The highlight of the week's calendar is UK labour market data out Tuesday - MNI's preview is here. The main focus is on private regular earnings, and we see risks to consensus expectations as tilted slightly to the upside.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is up 1.5bps at 2.005%, 5-Yr is up 1.2bps at 2.268%, 10-Yr is up 0.2bps at 2.668%, and 30-Yr is down 0.6bps at 3.26%.
• UK: The 2-Yr yield is up 0.9bps at 3.807%, 5-Yr is up 0.7bps at 3.935%, 10-Yr is down 0.5bps at 4.461%, and 30-Yr is down 1.1bps at 5.239%.
• Italian BTP spread down 2.3bps at 74.4bps / French OAT down 2.2bps at 77.5bps 

RRP usage rises to $7.152B with 11 counterparties this afternoon from $4.903B Friday. Compares to $2.435B on October 24 (lowest level since mid-March 2021) and the year's highest usage of $460.731B on June 30.

• RES 4: 0.8865 1.764 proj of the Sep 15 - 25 - Oct 8 price swing  
• RES 3: 0.8848 1.618 proj of the Sep 15 - 25 - Oct 8 price swing  
• RES 2: 0.8835 High May 3 2023
• RES 1: 0.8830 High Nov 5 
• PRICE: 0.8779 @ 16:13 GMT Nov 10
• SUP 1: 0.8763 Low Nov 3   
• SUP 2: 0.8754 20-day EMA 
• SUP 3: 0.8716 50-day EMA
• SUP 4: 0.8656 Low Oct 8 and a key support  

A bullish condition in EURGBP remains intact and recent gains reinforce current conditions. The move higher has confirmed a resumption of the uptrend and maintains a bullish price sequence of higher highs and higher lows. Sights are on 0.8835, the May 3 2023 high. Initial support lies at 0.8763, the Nov 3 low and just above the 20-day EMA, at 0.8755. Note that the trend is overbought, a pullback would be considered corrective.