GILTS: Yields A Little Higher, Strong Auction Demand Fails To Spur Buying
Jan-23 10:33
Gilts initially steady after smooth digestion of the GBP4.25bln 4.375% Mar-28 auction, which provided a tight tail (tightest for 3-Year auction since January ’24) and solid cover ratio, despite the uptick in the amount on offer.
- Selling then creeps back in.
- Pre-auction setup across gilts and EGBs, coupled with a move higher in oil & European gas prices, had weighed ahead of the auction.
- Futures -22 at 91.73, session low.
- Yesterday’s low has been pierced, with the bearish technical setup in the contract intact.
- Initial support comes in at the Jan 20 low (91.10).
- Yields 1-2bp higher, 5s lead the selling.
- GBP STIRs little changed on the day.
- BoE-dated OIS showing 65bp of cuts through ’25 vs. 64.5bp late yesterday.
- We still look for 25bp cuts in February and May, ~22bp and ~40bp priced through those meetings, respectively.
- SONIA futures now flat to -2.5 owing to the modest gilt weakness.
- Comments from U.S. President Trump and U.S. weekly jobless claims data eyed from here, flash services PMI data due Friday.
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COMMODITIES: Copper Gains Alongside US Equity Futures
Dec-24 10:20
| WTI Crude up $0.41 or +0.59% at $69.62 |
| Natural Gas up $0.07 or +1.91% at $3.719 |
| Gold spot up $4.96 or +0.19% at $2617.59 |
| Copper up $2.75 or +0.67% at $410.9 |
| Silver down $0.07 or -0.22% at $29.5901 |
| Platinum up $1.65 or +0.18% at $943.56 |
EQUITIES: US Futures Point to Mildly Higher Open
Dec-24 10:18
| Japan's NIKKEI closed lower by 124.49 pts or -0.32% at 39036.85 and the TOPIX ended 0.52 pts higher or +0.02% at 2727.26. |
| Elsewhere, in China the SHANGHAI closed higher by 42.271 pts or +1.26% at 3393.528 and the HANG SENG ended 215.16 pts higher or +1.08% at 20098.29. |
| Dow Jones mini up 23 pts or +0.05% at 43342, S&P 500 mini up 7.25 pts or +0.12% at 6042.75, NASDAQ mini up 37.25 pts or +0.17% at 21789. |
FOREX: FX OPTION EXPIRY
Dec-24 09:40
Of note:
EURUSD 1.31bn at 1.0400 (fri).
- EURUSD: 1.0400 (590mln).
- USDJPY: 157.00 (431mln).
- USDCNY: 7.2814 (600mln).
