EURGBP TECHS: Bearish Break

• RES 4: 0.8800 Round number resistance 
• RES 3: 0.8781 2.236 pro of the Mar 3 - 11 - 28 price swing
• RES 2: 0.8738 High Apr 11 high and a key resistance
• RES 1: 0.8697/98 High Jul 15/16
• PRICE: 0.8661 @ 17:03 BST Jul 16
• SUP 1: 0.8630 Low Jul 14
• SUP 2: 0.8599 20- day EMA
• SUP 3: 0.8537 50-day EMA
• SUP 4: 0.8508 Low Jun 27

A bullish condition in EURGBP remains intact and the cross is trading closer to its recent highs. Fresh cycle highs this week maintain the price sequence of higher highs and higher lows and note too that moving average studies are in a bull-mode position, highlighting a dominant uptrend. Scope is seen for a climb towards key resistance at 0.8738, the Apr 11 high. Support to watch lies at 0.8599, the 20-day EMA.

• Date $MM Issuer (Priced *, Launch #)
• 07/16 $4B #JP Morgan 11NC10 +112.5
• 07/16 $2.75B #Citigroup PerpNC5 6.875%
• 07/16 $2.2B #Indonesia Sukuk $1.1B 5Y 4.55%, $1.1B 10Y 5.2%
• 07/16 $2.2B #Kioxia Holdings $1.1B 5NC2 6.25%, $1.1B 8NC3 6.625%
• 07/16 $500M #Golub Capital Private Cr 3Y +183

Bunds outperformed Gilts Wednesday following firmer-than-expected UK inflation data.

• Gilt yields gapped higher on the open, following UK June CPI coming in above consensus on most measures.
• But the move faded somewhat as the report was digested, with the broader scope of the report not significantly differing from the BOE's existing expectations for inflation developments (and greater focus anyhow on upcoming labour market data).
• In early afternoon trade, global core FI rallied as US PPI data came in on the soft side
• Volatility picked up toward the cash close on reports that US President Trump planned to soon fire Federal Reserve Chair Powell. This saw long-end yields rise again but Trump's denial made just before the European cash close saw Gilt and Bund yields have a final dip.
• The German curve leaned bull steeper on the day, with the UK's leaning bear flatter - the belly outperformed on both curves.
• Periphery/semi-core EGB spreads were little changed.
• Thursday's highlight is the UK labour market report - our preview is here. The main focus this month will be on a combination of private regular average earnings and the notoriously revised payrolls numbers.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is down 2.7bps at 1.86%, 5-Yr is down 3.3bps at 2.23%, 10-Yr is down 2.5bps at 2.687%, and 30-Yr is down 1.2bps at 3.214%.
• UK: The 2-Yr yield is up 1.9bps at 3.855%, 5-Yr is up 1.1bps at 4.042%, 10-Yr is up 1.4bps at 4.639%, and 30-Yr is up 1.1bps at 5.469%.
• Italian BTP spread down 0.4bps at 85.6bps / French OAT down 0.2bps at 69.8bps