POWER: French Spot Power to Edge Down

France Industrial Production in September was weaker than expected at -0.9% M/M (vs -0.6% consensus, 1.1% prior revised down from 1.4%) and -0.6% Y/Y (vs -0.4% consensus, 0.1% prior revised down from 0.5%).

• The weakness was driven by both manufacturing and 'extractive industries' production. The former declined 0.8% M/M (albeit less than consensus of -1.3% from 4 analysts estimates, 1.4% prior). Extractive industries production fell 1.2% M/M (vs -0.1% prior).
• Within manufacturing, the decline was largely due to a decline in the pharmaceutical industry which partially reversed August's climb printing -11.7% M/M, after rising 18.8% in August - the weakest print since March 2023. There was also weakness in "wood, paper and printing" which fell 1.6% M/M after a fall of 1.8% M/M last month and "other manufacturing industries" which fell 1.4% M/M.
• Manufacturing of transportation increased 0.7% M/M (following the 3.4% M/M rise in August and the soft July). However, automobile manufacturing fell 2.0%M/M with "other transport" up 2.4% M/M.
• Manufacture of capital goods also declined 0.9% M/M (following a fall of 1.7% in August), whilst Food and "coking and refining" rose in September.

Several potential drivers for the downtick in bonds this morning:

• Spill over from the firmer-than-expected Chinese data/bid in equities.
• Continued German political and fiscal risks.
• Higher beta of gilts being further amplified by the reaction to last week’s Budget.
• Modest pressure from set up for Austrian supply (although this is minor when it comes to wider EGBs).
• Tsys seemed to track moves elsewhere, as opposed to leading, so we wouldn’t point to any last-minute pre-election set up as a meaningful factor at this stage.

• RES 4: $36.050 -  2.236 proj of the Aug 8 - 26 - Sep 6 price swing   
• RES 3: $35.226 - 61.8% of the 2011 - 2020 major bear leg  
• RES 2: $35.167 - 2.00 proj of the Aug 8 - 26 - Sep 6 price swing 
• RES 1: $34.903 - High Oct 23 and the bull trigger                        
• PRICE: $32.481 @ 08:01 GMT Nov 5 
• SUP 1: $32.251 - Intraday low     
• SUP 2: $31.616 - 50-day EMA   
• SUP 3: $30.152 - Trendline support drawn from the Aug 8 low  
• SUP 4: $27.686 - Low Sep 6 

Bullish conditions in Silver remain intact and the bear cycle that started on Oct 23 is considered corrective - for now. The metal has breached the 20-day EMA. A continuation lower would highlight scope for a deeper retracement and open £31.616, the 50-day EMA. For bulls, a reversal higher would refocus attention on $34.903, the Oct 23 high. Clearance of this level would confirm a resumption of the uptrend.