US TSYS: A Touch Firmer With Thin Volumes Ahead Of Payrolls
Jun-06 10:47
- Treasuries are a little off yesterday’s lows seen after a Trump-Xi call and hawkish ECB press conference, with thin volumes ahead of today’s nonfarm payrolls report.
- MNI Preview found here.
- Fed Vice Chair for Supervision Bowman is the only FOMC member scheduled to appear today ahead of the media blackout starting 0001ET tomorrow.
- Cash yields are between 0.9-1.4bp lower on the day, with 2Y yields at 3.91% in the middle of the week's range.
- Curves consolidate yesterday’s flattening, with 2s10s at 47.3bp and 5s30s at 89.3bps having cleared 100bp early on Monday.
- TYU5 trades at 110-27 (+01+) having tentatively lifted off yesterday’s late low of 110-23+, with very low cumulative volumes of 205k.
- A bull cycle remains in play. Yesterday’s high of 111-14+ met resistance at 61.8% of the May 1-22 downleg, after which lies 111-19+ (1.0% 10-dma envelope), whilst support is seen at a key 110-11 (Jun 3 low).
- Data: Nonfarm payrolls May (0830ET), Consumer credit Apr (1500ET)
- Fedspeak: VC Supervision Bowman (1000ET) – see STIR bullet
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Historical bullets
EQUITIES: Estoxx outright Put buyer
May-07 10:46
SX5E (16th May) 4650p, bought for 2.4 in 5k.
OUTLOOK: Price Signal Summary - Trend Structure In Gold Remains Bullish
May-07 10:45
- On the commodity front, Gold has recovered from its recent lows and this suggests the correction between Apr 22 - May 1, is over. A continuation higher would refocus attention on key resistance and the bull trigger at $3500.1, the Apr 22 high. Clearance of this level would confirm a resumption of the primary uptrend. Key short-term support has been defined at $3202.0, the May 1 low. A break of this level is required to signal scope for a deeper retracement.
- In the oil space, a medium-term bearish trend in WTI futures remains intact and short-term gains are considered corrective. The move down that started Apr 23 signals the end of the correction between Apr 9 - 23. That cycle higher allowed an oversold condition to unwind. Attention is on $54.67, the Apr 9 low and a bear trigger. Clearance of this level would resume the downtrend and open $53.72, a 2.236 projection of the Feb 20 - Mar 5 - Apr 2 price swing. Key resistance to watch is $64.12, the 50-day EMA.
EU: Germany's Merz To Meet w/EU & NATO Leaders 9 May
May-07 10:37
New German Chancellor Friedrich Merz is set to travel to Brussels on Friday, 9 May, to mark Europe Day. He will meet with European Commission President Ursula von der Leyen, and the two will hold a joint press conference at 1100CET (0500ET, 1000BST). Merz will also hold talks with European Council President Antonio Costa and NATO Secretary-General Mark Rutte.
- Much has been made of Merz's intention to take a much more active role on the foreign policy stage compared to his predecessor Olaf Scholz. This is exemplified by his visit to the two other Weimar Triangle nations on his first full day in office, with a clear attempt to put the three largest defence contributors in the EU front and centre of the Union's security and defence decision-making process.
- As Politico noted in February, this shift could put him if not at odds then at least in some form of competition with VdL, despite both hailing from the centre-right Christian Democratic Union. Politico: "What may look like paper-thin policy differences between the two could well turn into a full-blown power struggle as von der Leyen grapples with Merz’s increasing interest in the EU scene. Von der Leyen hews to the political center, championing green reforms, gender parity and keeping Europe’s internal borders open. Merz, by contrast, is a classic West German conservative who wants deregulation, has spoken out against parity in government, and has no problem shutting Germany’s borders to its neighbors."
