BRENT TECHS: (X6) Outlook Remains Bullish

Germany will return to the market with a triple tranche Green auction today, while Austria will hold the non-competitive round of yesterday’s auction. Spain and France are scheduled to hold auctions tomorrow while Belgium will hold an ORI operation on Friday. Austria and Germany held auctions yesterday. We look for gross issuance of E27.5bln for the week, marginally higher than the E27.3bln seen last week.

For the full document with a recap of issuance so far this week and a look ahead to issuance through the remainder of this week and next week click here.

• Germany will return to the market today with a triple line Green auction. On offer will be E500mln of the 2.10% Apr-29 Green Bobl (ISIN: DE000BU35025), E500mln of the 2.50% Feb-35 Green Bund (ISIN: DE000BU3Z047) and E500mln of the 1.80% Aug-53 Green Bund (ISIN: DE0001030757).

• RES 4: $110.00 - Round number resistance 
• RES 3: $101.40 - 0.764 proj of the Dec 16 ‘25 - May 18 - Jul 2 swing
• RES 2: $99.12 - High May 18 and a bull trigger
• RES 1: $84.29/95.30 - 20-day EMA / High Jul 23 and key resistance
• PRICE: $79.05 @ 07:11 BST Aug 05
• SUP 1: $78.11 - Intraday low  
• SUP 2: $76.48 - 76.4% retracement of the Jul 2 - 23 bull leg   
• SUP 3: $70.67 - Low Jul 2 and the bear trigger
• SUP 4: $68.39 - 76.4% retrace of the Dec 16 ‘25 - May 18 bull leg

The current bear cycle in Brent futures - a correction - remains in play for now. The contract has breached the 50-day EMA and this signals scope for an extension towards $76.48, a Fibonacci retracement. A breach of this level would open $70.67, the Jul 2 low and a bear trigger. On the upside, a  reversal higher would refocus attention on key resistance at $95.30, the Jul 23 high.

Gilt futures trade off overnight highs but remain underpinned following the headlines surrounding the potential imminent reopening of the Strait of Hormuz over the last 24 hours.

• Contract last +22 at 87.84.
• Continuation higher would signal scope for an extension towards 88.48, a Fibonacci retracement level. On the other hand, a reversal lower would refocus attention on key support at 85.77, the Jul 23 low and bear trigger.
• Local news flow shows a polling bounce for Labour under new leader Bunrham, with the party leading Reform UK for the first time in over a year per the latest JL Partners survey (27% vs. 25%).
• Elsewhere, flexibility within the existing fiscal rules remains a focus, although this won’t remove the fiscal pressure evident in the UK, just provide some space around the edges.
• Final services and composite PMI data is due this morning, but expect more focus to be placed on cross-market inputs (headline flow surrounding Iran & U.S. data).