US TSY FUTURES: Bear Curve Steepening Hits High Gear
Tsy yields hit new cycle highs yet again (2YY 4.3450%, 10YY 3.8514%, 30YY 3.6809%), sell-off gaining momentum more after recent BOE Bailey headlines:
- "BOE BAILEY WON'T HESITATE TO CHANGE RATES BY AS MUCH AS NEEDED", though OE TO ASSESS POUND DROP, FISCAL PLAN AT NEXT SCHEDULED MEETING", bbg
- than to domestic Fed speak: Atlanta Fed Bostic virtual event:
- NEED TO CONTROL INFLATION, WILL BE VOLATILE UNTIL THEN .. WE'VE STILL GOT A WAYS TO GO TO CONTROL INFLATION, Bbg.
- NEED TO CONTROL INFLATION, WILL BE VOLATILE UNTIL THEN .. WE'VE STILL GOT A WAYS TO GO TO CONTROL INFLATION, Bbg.
- Yield curve bear steepening nearing last Thu's highs, currently running:
- 3M10Y +11.553, 60.25 (L: 46.853 / H: 60.453)
- 2Y10Y +8.553, -44.17 (L: -55.982 / H: -43.954)
- 2Y30Y -0.907, -61.498 (L: -68.009 / H: -54.978)
- 5Y30Y -7.12, -44.774 (L: -45.94 / H: -36.857)
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AUSSIE 10-YEAR TECHS: (U2) Outlook Deteriorating
- RES 3: 97.455 - High Mar 18
- RES 2: 97.185/275 - High Apr 5 / 200-dma
- RES 1: 97.040 - High Aug 03
- PRICE: 96.395 @ 15:51 BST Aug 26
- SUP 1: 96.275 - Low Aug 25
- SUP 2: 96.208 - 3.0% Lower Bollinger Band
- SUP 3: 95.663 - Low Jun 16
Aussie 10yr futures slipped further Thursday and have dipped below key support at 96.355, Jul 22 low. This weakens the bull cycle posted since mid-June, opening the gap with the 200-dma on the continuation contract, at 97.275. The bull trigger is 97.040, the Aug 3 high. On the downside, recent weakness suggests scope for a deeper retracement towards the mid-Jun low of 95.663.
US TSY FUTURES: BLOCK, Late Dec 2Y Buy
+5,000 TUZ2 104-09.62, buy through 104-09.38 post-time offer at 1549:16ET
USDCAD TECHS: Still Trading Below Tuesday’s High
- RES 4: 1.3224 High Jul 14 and key resistance
- RES 3: 1.3135 High Jul 15
- RES 2: 1.3107 76.4% retracement of the Jul 14 - Aug 11 downleg
- RES 1: 1.3063 High Aug 23
- PRICE: 1.2998 @ 16:37 BST Aug 26
- SUP 1: 1.2887 50-day EMA values
- SUP 2: 1.2828/2764 Low Aug 17 / 200-dma
- SUP 3: 1.2728 Low Aug 11 and key support
- SUP 4: 1.2685 76.4% retracement of the Jun 8 - Jul 14 upleg
USDCAD rallied into the Friday close having found support at the Thursday low, however, the pair remains below Tuesday’s 1.3063 short-term trend high. Near-term trend conditions still appear bullish following the recent strong recovery from 1.2728, the Aug 17 low. A resumption of gains and a break of 1.3063 would open 1.3107 next, a Fibonacci retracement. Note that MA studies are in a bull mode condition, highlighting an uptrend. Initial firm support is at 1.2887, the 50-day EMA.
