BNM: Bond Wrap
- With no economic data or government bond auctions today, markets reacted to the US data overnight with the currency up in early trade and the equity markets in positive territory.
- Bond markets saw yields initially drifting higher before gaining some momentum in late morning trade.
- Yields were 1-3bps higher across intermediate maturities.
3yr 3.353% 5yr 3.521%(+3bp) 10yr 3.754% (+1bp) 30yr 4.446%
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GILT TECHS: (U4) Remains Above Support At The 20-Day EMA
- RES 4: 102.15 2.382 proj of the May 29 - Jun 4 - 10 price swing
- RES 3: 102.00 Round number resistance
- RES 2: 101.78 2.236 proj of the May 29 - Jun 4 - 10 price swing
- RES 1: 100.43/101.46 High Aug 6 / 5
- PRICE: 99.72 @ Close Aug 12
- SUP 1: 99.16 20-day EMA
- SUP 2: 98.54/97.46 50-day EMA / Low Jul 26 and a key support
- SUP 3: 96.96 Low Jul 3
- SUP 4: 96.57 Low Jul 1
Recent gains in Gilt futures confirmed a confirmation of the uptrend that started May 29. A fresh high on Aug 5 reinforces current conditions. Note that 99.23, the Jun 21 peak, has been cleared. Scope is seen for a climb towards 101.78, a Fibonacci projection point. Initial key support lies at 99.16, the 20-day EMA. The latest pullback appears to be a correction, allowing an overbought trend condition to unwind.
EUROZONE T-BILL ISSUANCE: W/C August 12, 2024
Spain and Finland are both due to sell bills today, whilst Germany and France have already issued bills this week. We expect issuance to be E15.0bln in first round operations, down from E31.7bln last week.
- Today, Spain will come to the market to sell a combined E1.5-2.5bln of the 3-month Nov 8, 2024 letras and the 9-month May 7, 2025 letras.
- Finally also today, Finland will sell up to a combined E2bln of the 6-month Feb 13, 2025 RFTB and the 9-month May 13, 2025 RFTB.
For more on future auctions see the full MNI Eurozone/UK T-bill auction calendar here.
USDJPY TECHS: Oversold Condition Unwinds
- RES 4: 153.93 50-day EMA
- RES 3: 150.73 20-day EMA
- RES 2: 149.77 High Aug 2
- RES 1: 148.22 High Aug 12
- PRICE: 147.74 @ 06:37 BST Aug 13
- SUP 1: 144.29 Low Aug 7
- SUP 2: 141.70/140.82 Low Aug 5 and the bear trigger / Low Jan 2
- SUP 3: 140.25 Low Dec 28 ‘23 and a key support
- SUP 4: 138.07 Low Dec 28
USDJPY remains bearish and the recent impulsive sell-off has strengthened the trend condition. The move down signals scope for an extension towards the next key support at 140.25, Dec 28 ‘23 low. Note that the bear cycle remains in an extreme oversold condition, and the latest recovery - a correction - is allowing this set-up to unwind. Initial firm resistance is seen at 150.73, the 20-day EMA. The bear trigger is 141.70, the Aug 5 low.
