JGB TECHS: (U2) Solid Bounce Into the Weekly Close

• RES 4: 1.3077 High May 16 and the bull trigger
• RES 3: 1.2982 High May 16
• RES 2: 1.2896 High May 18 and a key resistance
• RES 1: 1.2686/2755 High Jun 2 / 20-day EMA
• PRICE: 1.2583 @ 16:06 BST Jun 3
• SUP 1: 1.2551 Low Jun 3
• SUP 2: 1.2472 2.0% 10-dma envelope
• SUP 3: 1.2459 Low Apr 21
• SUP 4: 1.2403Low Apr 5 and key support

USDCAD maintains a softer tone and the pair traded lower again Friday. Price has arrived at 1.2562, the 76.4% retracement of the Apr 5 - May 12 uptrend. A clear breach of the level would strengthen current bearish conditions and pave the way for weakness towards 1.2459, Apr 21 low and potentially 1.2403, the Apr 5 low and a key support. Key resistance is seen at 1.2755, the 20-day EMA.

• RES 4: 0.7465 76.4% retracement of the Apr 5 - May 12 bear leg
• RES 3: 0.7400 Round number resistance
• RES 2: 0.7343 61.8% retracement of the Apr 5 - May 12 bear leg
• RES 1: 0.7283 High Jun 3
• PRICE: 0.7221 @ 16:04 BST Jun 3
• SUP 1: 0.7126/7036 20-day EMA / Low May 25
• SUP 2: 0.6950 Low May 18
• SUP 3: 0.6829 Low May 12 and the bear trigger
• SUP 4: 0.6805 Low Jun 22 2020

AUDUSD traded higher Thursday before fading slightly through the Friday session. Thursday's rally resulted in a break of key resistance at 0.7266, the May 4/5 high. This strengthens bullish conditions and signal scope for a move towards 0.7343, a Fibonacci retracement. Note that the current bull cycle is still considered corrective. A reversal lower would refocus attention on the bear trigger at 0.6829, May 12 low. Initial firm support to watch is at 0.7036.

Tsys futures trade weaker, off lows to near middle of session range on light volumes for a headline payroll session, TYU2 less than 950k after the bell. Tsys gapped lower following May NFP gain of +390k vs. +310k est, 30YY climbs to 3.1554% high, while yield curves steepened out briefly.

• Fed hike expectations gained slightly out the curve while 50bp hikes at each of the next two meeting remain a lock. Implied Fed hikes firm slightly for meetings later in the year after payrolls. The 143bp for Sep takes it back to yesterday highs whilst the 199bp to year-end nudges 1bp higher and closes on the post May FOMC high of 202bps.
• Limited react to S&P Global composite PMI revised 0.2pts lower in the final release, 53.6 in May. Short end eased after ISM Services index slightly softer than expected, falling from 57.1 to 55.9 (cons 56.5), still Seeing Covid-19 Impact.
• Aside from data, market reacted negatively to reports of Elon Musk email to Tesla execs: "pause all hiring worldwide" late Thu. Reuters reported Musk would like to cut 10% of Tesla's workforce due to a "super bad feeling" about the economy. Musk clarified later in the day: hiring freeze for salaried employees while hourly jobs to rise.
• Cleveland Fed Pres Mester states she wants to see "COMPELLING EVIDENCE INFLATION IS ON DOWNWARD PATH" implying the Fed will continue to hike past signs of inflation peaking. Follow up headline: Mester "COULD BACK 50 BPS SEPT. HIKE IF INFLATION DOESN’T COOL, Bbg.
  
  Needless to say, nothing really new, markets not reacting to CNBC interview
• Reminder Fed enters media blackout at midnight tonight. No significant data next Monday, but Tsy does have two bill auctions