US 10YR FUTURE TECHS: (Z5) Support Remains Exposed
- RES 4: 114-02 High Oct 17 and the bull trigger
- RES 3: 113-29 High Oct 22
- RES 2: 113-18+ High Oct 28
- RES 1: 113-02 High Nov 5& 7 and a key near-term resistance
- PRICE: 112-29+ @ 11:15 GMT Nov 12
- SUP 1: 112-09+ Low Nov 5
- SUP 2: 112-09/06 100-dma / Low Sep 25 and a reversal trigger
- SUP 3: 112-03 Trendline support drawn from the May 22 low
- SUP 4: 111-23 50.0% retracement of the May 22 - Oct 17 bull leg
A short-term bear theme in Treasuries remains in place and recent gains still appear corrective. Attention is on the bear trigger at 112-06, the Sep 25 low, and the 100-DMA, at 112-09. A clear break of these price points would strengthen a bear theme and expose trendline support at 112-03. The trendline is drawn from the May 22 low. Resistance to watch is 113-02, the Nov 5 and 7 high. Clearance of this level would be bullish.
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BOE: Greene says more concerned about food prices than energy
This is an interesting point. The research the MPC has been citing has suggested that food prices, energy and fuel prices have outsized impacts on inflation expectations. And the narrative had been that food prices were the more concerning recently. This seems to be the point that Greene is making - not that she would be more worried about food than energy if they were both increasing - but that food prices are more of the near-term concern.
- "*BOE'S GREENE: I AM MORE CONCERNED ABOUT FOOD THAN ENERGY PRICES
- *BOE'S GREENE: HOUSEHOLDS PARTICULARLY SENSITIVE TO FOOD PRICES" Bloomberg
OUTLOOK: Price Signal Summary - Recovery In Gilts Extends
- In the FI space, Bund futures rallied sharply higher on Friday confirming a resumption of the recovery that started Sep 25. The move higher reinforces a bullish theme and attention is on the next key resistance at 129.44, the Sep 10 high. Clearance of this hurdle would pave the way for a climb towards 129.58, 61.8% of the Jun 13 - Sep 3 bear leg. Initial support to watch lies at 128.64, the 50-day EMA. A break of this level would instead signal a reversal.
- Gilt futures rallied sharply higher on Friday confirming a resumption of the recovery that started Sep 25. The move higher reinforces a bullish theme and attention is on the next key resistance at 91.28, the Sep 24 high. It has been pierced, a continuation higher would pave the way for an extension towards key resistance at 91.82, the Sep 11 high. On the downside, price needs to trade below support at 90.26, the Sep 26 low, to reinstate a bearish theme. First support lies at 90.86, the 20-day EMA.
BOE: Headline From Greene Not Surprising Thus Far
Comments crossing from BOE's Greene, who is speaking at a Society of Professional Economists event. Thus far, not much too surprising. A reminder that Greene wrote an OpEd in the FT last week, where she flagged the idea of skipping a rate cut (in line with her recent comments and not a surprise at all).
"*BOE'S GREENE: ACTIVITY STRONGER THAN THOUGHT A YEAR AGO" Bloomberg
"*BOE'S GREENE: INFLATION AND WAGE GROWTH STRONGER TOO" Bloomberg
"*BOE'S GREENE: CONCERNED DISINFLATION PROCESS SLOWING" Bloomberg
