ITALY AUCTION RESULTS: BTP Short Term / BTPei

• USD/JPY's reversal off the weekly high has held well, with spot returning to well within range of the Y145.00 handle having traded Y148 at the high yesterday. The remarkable about-turn, triggered by the announcement of a Israel-Iran ceasefire, has looked through early signs of fragility. Israel detected inbound missile strikes, which have been denied via state-run Iranian media.
• This keeps the USD weaker on the day, buoying GBP/USD and EUR/USD through 1.36 and 1.16 respectively, as rallies remain shallow. Geopolitical risk remains the primary focus, however markets seem to be of the view that we're through the worst of the Middle-east tensions and there's a relatively minimal risk of an oil price spike hereon.
• Becalmed commodities markets are allowing risk proxy currencies to outperform. As such, AUD and NZD are easily the best performers in G10, tipping both AUD/USD and NZD/USD back into the uptrend channel dtrawn off the May lows.  
• Canadian CPI data is a calendar highlight Tuesday - particularly as USD/CAD reversed hard off highs on the challenge of the 50-dma this week. This brings today's CPI release into sharper focus, particularly given the  partial pricing for a July 30 rate cut (OIS sees just over 1:3 probability of a 25bps cut) as well as the now-prolonged trade talks with the US, on which Carney stated yesterday his government are still focused on after an overnight call with  Trump.

WTI futures have reversed sharply from Monday’s session high. For now, the sell-off is considered corrective and the pullback has allowed a recent overbought condition to unwind. Support to watch is at the 50-day EMA, at $64.51. It has been pierced, a clear break of it would signal scope for a deeper retracement. On the upside, initial resistance to watch is $71.39, the 50.0% retracement of the Jun 23 - 24 high-low range. A bullish theme in Gold remains intact and the latest pullback is considered corrective. Medium-term trend signals are bullish too - moving average studies are in a bull-mode position, highlighting a dominant uptrend. Resistance at $3435.6, the May 7 high, has recently been pierced. A clear break of this level would strengthen the uptrend and open $3500.1, the Apr 22 all-time high. Initial key support to monitor is $3286.2, the 50-day EMA.

• WTI Crude down $2.33 or -3.4% at $66.25
• Natural Gas down $0.07 or -1.95% at $3.626
• Gold spot down $40.29 or -1.2% at $3327.18
• Copper up $4.05 or +0.83% at $494.3
• Silver up $0.05 or +0.13% at $36.1372
• Platinum up $16.94 or +1.31% at $1314.21