GBPUSD TECHS: Approaching Support At The 20-Day EMA
- RES 4: 1.3913 High Sep 14 2021
- RES 3: 1.3681 1.500 proj of the Feb 28 - Apr 3 - 7 price swing
- RES 2: 1.3605 1.382 proj of the Feb 28 - Apr 3 - 7 price swing
- RES 1: 1.3593 High May 26 and a bull trigger
- PRICE: 1.3485 @ 16:54 BST May 29
- SUP 1: 1.3376 20-day EMA
- SUP 2: 1.3335/3212 Low May 20 / 50-day EMA
- SUP 3: 1.3140 Low May 12 and key support
- SUP 4: 1.3041 Low Apr 14
The trend condition in GBPUSD remains bullish and the pullback from Monday’s high appears corrective. First key support lies at 1.3376, the 20-day EMA. A clear break of this average would suggest potential for a deeper retracement and expose the 50-day EMA, at 1.3212. A resumption of gains would refocus attention on 1.3593, the May 26 high and bull trigger. A break of this level would resume the uptrend.
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US: FED Reverse Repo Operation
RRP usage rises to $157.537B this afternoon from $148.649B yesterday. Usage had fallen to $54.772B last Wednesday, April 16 -- lowest level since April 2021. Conversely, usage had surged to the highest level since December 31, 2024 on Monday, March 31: $399.167B. The number of counterparties at 37.
BONDS: EGBs-GILTS CASH CLOSE: Edges Higher On Soft Data
European FI gained slightly on Tuesday, retracing some of the previous session's weakness.
- Gains were fairly steady through the session, with few major headline/macro catalysts, amid a backdrop of data that was largely on the weaker side of expectations.
- Spanish April preliminary HICP came in firmer than expected, though Spanish GDP came in soft.
- ECB consumer inflation expectations rose for both 1Y and 3Y, though the EC Economic Sentiment survey was weaker than expected.
- Below-consensus US job openings and consumer confidence readings added to the theme.
- ECB's Stournaras sounded cautious on moving rates below 2% (from 2.25% at present); an MNI sources piece debate within the Governing Council ahead of the June rate decision.
- Both the German and UK curves bull flattened, with 10Y Gilts touching 3-week lows. Periphery/semi-core EGB spreads widened modestly, with Portugal underperforming.
- Wednesday's calendar includes French GDP and German retail sales/unemployment, but the highlight will be German, French, and Italian flash April inflation.
Closing Yields / 10-Yr EGB Spreads To Germany
- Germany: The 2-Yr yield is down 0.6bps at 1.736%, 5-Yr is down 1.5bps at 2.044%, 10-Yr is down 2.4bps at 2.497%, and 30-Yr is down 2bps at 2.927%.
- UK: The 2-Yr yield is down 2.3bps at 3.843%, 5-Yr is down 2.8bps at 3.958%, 10-Yr is down 2.9bps at 4.48%, and 30-Yr is down 2.6bps at 5.244%.
- Italian BTP spread up 0.2bps at 111bps / Portuguese up 1.3bps at 55.3bps
PIPELINE: Corporate Bond Update
Corporate bond issuance looks to finish April strong with at least another $21.5B to price today:
- Date $MM Issuer (Priced *, Launch #)
- 04/29 $9B #World Bank $4B 3Y +35, $5B 7Y +55
- 04/29 $5B *KFW 5Y SOFR+42
- 04/29 $2B #ADQ $1B 5Y +85, $1B 10Y +95
- 04/29 $1.75B *Swedish Export Credit 3Y SOFR+45
- 04/29 $1B #GS Private $400M 3Y +225, $600M 5Y +250
- 04/29 $900M #Tyco Electronics $450M each: +5Y +83, 10Y +97
- 04/29 $800M #Weir Group 5Y +160
- 04/29 $500M #Constellation Brands 5Y +107
- 04/29 $500M Southwestern Public Service 10Y +115
- 04/29 $Benchmark Las Vega Sands 3Y +200, 5Y +225
