BONDS: US Treasuries and Gilt Roll update

While gilts initially trade lower, buyers quickly emerge, leaving the space little changed vs. late Friday levels.

• Broader core global FI markets trade weaker after U.S. Treasury Secretary Bessent pointed to trade talks moving in the right direction, particularly with Asia.
• Impending supply in Europe also weighs on EGBs.
• Futures as low as 93.16 before a bounce to 93.33. Contract last ~93.25.
• The recent bullish technical theme remains intact. Initial resistance located at Friday’s high (93.34), follow by a Fibonacci retracement level at 93.44.
• Initial support still located at the 20-day EMA (92.22 today).
• Yields little changed to 1bp lower, modest flattening bias to start the week.
• Initial support in 10s (4.460%) remains untested.
• GBP STIRs still trading around levels we flagged ahead of the gilt open, with just under 90bp of BoE cuts priced in through year-end.
• Final manufacturing PMI data (Thursday) headlines a limited domestic data calendar this week. BoEspeak from Ramsden (Tuesday) & Lombardelli (Wednesday) will also be eyed.
• On the supply front, the DMO will come to market with 30-Year (Tuesday) & 3-Year (Wednesday) paper this week.

• RES 4: $36.000 - Round number resistance 
• RES 3: $34.903 - High Oct 23 ‘24 and the bull trigger
• RES 2: $34.590 - High Mar 28  
• RES 1: $33.686 - High APr 25                                        
• PRICE: $32.916 @ 08:14 BST Apr 28
• SUP 1: $32.087 -  Low Apr 17               
• SUP 2: $30.577/28.351 - Low Apr 10 / 7 and the bear trigger
• SUP 3: $27.686 - Low Sep 6 ‘24   
• SUP 4: $27.180 - Low Aug 14 ‘24   

A strong rally in Silver last Wednesday reinforces the current bullish theme and the metal is holding on to the bulk of its latest gains. Price has cleared $33.117, 76.4% of the Mar 28 - Apr 7 bear leg. This paves the way for a climb towards $34.590, the Mar 28 high. On the downside, initial firm support to watch has been defined at $32.087, the Apr 17 low. A break of this level would undermine the bull cycle and highlight a potential reversal.

Norwegian bankruptcies rose 22.5% Y/Y in the four quarters to Q1 2025, a sign that high interest rates are weighing on mainland activity and employment. Markets price almost 20bps of easing through the June decision, placing focus on whether any guidance for a cut will be provided on May 8.

• A reminder that in her April 8 speech, Governor Wolden-Bache noted that “considerable weight shall be given to employment – also at times when inflation deviates significantly from the target”.
• Against this backdrop, hard labour market data has shown some signs of softening but continues to hold up reasonably well overall. The LFS trend unemployment rate was 4.1% in March, steady against February’s 2-tenth upwardly revised reading.
• Employment growth was -0.8% M/M (vs -0.1% prior), corresponding to a 3m/3m rate of 0.1% (vs -0.4% prior). The Q1 Regional Network Survey indicated Q1 employment growth at 0.2%.