UK T-BILL AUCTION RESULTS: 1/3/6-month UKTBs

• RES 4: 113-22   1.382 proj of the Apr 11 - 16 - 22 price swing 
• RES 3: 113-04   76.4% retracement of the Apr 7 - 11 bear leg
• RES 2: 112-12   61.8% retracement of the Apr 7 - 11 bear leg   
• RES 1: 112-90   Intraday high
• PRICE:‌‌ 112-06+ @ 10:47 BST Apr 30 
• SUP 1: 11107+ 20-day EMA
• SUP 2: 110-16+/109-08 Low Apr 22 / 11 and the bear trigger
• SUP 3: 108-26+ 76.4% retracement of the Jan 13 - Apr 7 bull cycle
• SUP 4: 108-21   Low Feb 19

Treasury futures are trading higher this week as the contract extends the latest rally. Recent gains have resulted in a break of 111-25, 50.0% of the Apr 7 - 11 bear leg. The breach undermines a recent bearish theme and opens 112-12, the 61.8% retracement. On the downside, a reversal and a resumption of weakness, would refocus attention on 109-08, the Apr 11 low and the bear trigger. First key support to watch is 110-16+, the Apr 22 low.

Natixis recommend entering SPGB 5s10s flatteners boxed against BTP 5s10s steepeners.

• They believe that at the current juncture “the tightening potential of EGB spreads is limited. We even believe the pay-off of sovereign spreads is now asymmetrical with widening risks taking over at some point”.
• Natixis suggest that “BTPs look more vulnerable than SPGBs, with Spain set to remain the top macro performer of the Eurozone”, while noting that the Italian macro situation is closer to Germany’s.
• They also think that “the shape of the Italian curve does not properly reflect potential vulnerabilities”.

• EUR/USD: $1.1375-95(E2.7bln), $1.1425(E500mln)
• USD/JPY: Y140.50($1.9bln), Y142.00($1.8bln), Y144.40-50($959mln), Y145.00($1.5bln), Y148.50($716mln)
• AUD/USD: $0.6115(A$1.1bln), $0.6250(A$702mln)
• NZD/USD: $0.5950(N$521mln)