US TSY OPTIONS: Apr'26 10Y Vol Sale

The latest Fed Beige Book (link): "Economic activity was little changed since the previous report, according to most of the twelve Federal Reserve Districts, though two Districts noted a modest decline and one reported modest growth."

• Labor: “Employment declined slightly over the current period with around half of Districts noting weaker labor demand. Despite an uptick in layoff announcements, more Districts reported contacts limiting headcounts using hiring freezes, replacement-only hiring, and attrition than through layoffs.”
• That compares to “Employment was flat overall, as both hiring and layoffs increased modestly.”
• Inflation: “Prices rose moderately during the reporting period. Input cost pressures were widespread in manufacturing and retail, largely reflecting tariff-induced increases. Some Districts noted rising costs for insurance, utilities, technology, and health care. The extent of passthrough of higher input costs to customers varied, and depended upon demand, competitive pressures, price sensitivity of consumers, and pushback from clients. There were multiple reports of margin compression or firms facing financial strain stemming from tariffs. Prices declined for certain materials, which firms attributed to sluggish demand, deferred tariff implementation, or reduced tariff rates. Looking ahead, contacts largely anticipate upward cost pressures to persist but plans to raise prices in the near term were mixed.”
• That compares to "Prices rose moderately on average, as certain cost pressures increased. [...] Most contacts expected to face at least modest further cost pressures moving forward, and some were concerned about a possible acceleration of prices in 2026."

• Treasuries show little reaction to latest Beige Book release:
• "..overall consumer spending declined further, while higher-end retail spending remained resilient ..."
• "Employment declined slightly over the current period with around half of Districts noting weaker labor demand. Despite an uptick in layoff announcements, more Districts reported contacts limiting headcounts using hiring freezes, replacement-only hiring, and attrition than through layoffs.”
• Currently, the Mar'26 10Y contract holds -1.5 at 113-175 (113-08 low / 113-19.5 high).
• A bullish theme in Treasuries remains intact and Tuesday’s gains reinforce current conditions. The recent breach of the 112-31 level, an area of congestion since Nov 5, marks an important short-term bullish development. This exposes 113-29+, the Oct 17 high and a key resistance.
• On the downside, initial support is at 112-30, the 20-day EMA. Support at the 50-day EMA, lies at 112-25.

• RES 4: 0.8893 2.000 proj of the Sep 15 - 25 - Oct 8 price swing    
• RES 3: 0.8875 High Apr 25 
• RES 2: 0.8868 61.8% retracement of the 2022 - 2024 bear leg
• RES 1: 0.8865 High Nov 14
• PRICE: 0.8785 @ 16:30 GMT Nov 26
• SUP 1: 0.8755 Low Nov 26   
• SUP 2: 0.8751 50-day EMA and a key near-term support
• SUP 3: 0.8726 Low Oct 28 
• SUP 4: 0.8656 Low Oct 8 and a key support  

The trend set-up in EURGBP remains bullish and the latest pullback appears corrective - for now. Moving average studies are in a bull-mode position, highlighting a dominant uptrend. Sights are on 0.8868 next, a Fibonacci retracement point. On the downside, the 20-day EMA has been breached. The next key support to monitor is 0.8751, the 50-day EMA. A clear break of the EMA would highlight a potential reversal.