COMMODITIES: WTI Futures Test 20-Day EMA Support
A bull cycle in WTI futures remains intact. However, the move lower from the Jan 29 high continues to highlight a corrective cycle. Attention is on support at the 20-day EMA, at $62.58 (pierced). The 50-day EMA lies at $60.87. A clear breach of the 50-day average would highlight a stronger reversal and open $58.53, the Jan 20 low. Key resistance and the bull trigger has been defined at $66.48, the Jan 30 high. Clearance of it would resume the uptrend. Recent gains in Gold highlights a retracement of the Jan 29 - Feb 2 sell-off. The next two resistance points to monitor are $5139.9 and $5314.0, Fibonacci retracement levels. Note that the sharp sell-off from the Jan 29 high still highlights a potential top in the L/T trend and from a S/T perspective, an unwinding of the recent extreme overbought condition. A resumption of bearish activity would refocus attention on $4403.0, the Feb 2 low.
- WTI Crude up $0.2 or +0.32% at $63.05
- Natural Gas down $0.07 or -2.02% at $3.152
- Gold spot up $52.38 or +1.06% at $4973.68
- Copper down $3.35 or -0.58% at $575.2
- Silver up $3.1 or +4.12% at $78.3844
- Platinum up $35.55 or +1.77% at $2040.64
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JPY: USDJPY Extends Pullback as Top Currency Official Weighs In
- The top currency official at Japan’s MOF Atsushi Mimura has also weighed in on the growing concerns over recent FX moves, notably stating that they are not just looking at moves against the dollar, they are looking at various pairs. Mimura’s comments add to additional warnings from Finance Minister Katayama this morning, highlighting that appropriate responses will be made against speculative moves.
- USDJPY has sold off to a fresh session low in sympathy, at 158.68, with a slightly softer dollar through early European trade assisting the pair’s pullback from overnight highs to around 75 pips.
- As noted earlier, the fact that domestic economic factors have been so influential on the latest Yen slide is likely to keep dips for cross/JPY very well supported, and a test of the BOJ/MOF resolve currently looks to be a growing inevitability.
- Immediate targets for a resumption of USDJPY strength include 159.60 and 160.00, both Fibonacci projection points. Initial support to watch remains much further down at 156.90, the 20-day EMA.
GILT AUCTION RESULTS: Strong 10-year auction
- Today's auction sees the highest bid-to-cover at a 10-year auction since August and the second highest ever volume of bids at a 10-year gilt auction.
- The tail of 0.3bp was respectable (in line with the last auction) while the LAP (lowest accepted price) was above the pre-auction mid-price.
GILT AUCTION RESULTS: 4.75% Oct-35 Gilt
| 4.75% Oct-35 Gilt | Previous | |
| ISIN | GB00BTXS1K06 | |
| Amount | GBP4.50bln | GBP4.50bln |
| Avg yield | 4.456% | 4.613% |
| Bid-to-cover | 3.26x | 3.05x |
| Tail | 0.3bp | 0.3bp |
| Avg price | 102.295 | 101.057 |
| Low price | 102.275 | 101.030 |
| Pre-auction mid | 102.245 | 101.016 |
| Previous date | 10-Dec-25 |
