EURGBP TECHS: Bull Cycle Intact

• The USD resumed the recent spell of weakness Wednesday, helping the ICE USD Index through the post-NFP low. Prices have also broken interim support at the 50-dma - a level that had drawn notable focus through the YTD downtrend and helped define the downtrend. EUR/USD topping the Friday high and layered resistance between 1.1597-00 further triggered USD selling.
• Interjections from potential next Fed chair Hassett helped weigh on the USD, as he voiced his support for a more Greenspan-like approach to policymaking, with a lesser focus on consensus-forming. This led markets to more quickly price in rates conforming to Trump's preference for easy policy. A later Bloomberg report that suggested Trump was being advised to appoint an interim Fed governor that can skip the Senate nomination process made little impact on pricing - although the expedited timeline could mean a new Trump appointee is installed ahead of the September rate decision.  
• Resilient GBP/USD comes despite the NIESR estimates out earlier today that suggests the government are facing a more dire fiscal picture in Autumn than previously expected - suggesting markets are well priced for sharp spending cuts and/or tax rises at the next Budget. Instead, it's the BoE decision Thursday that could be of more consequence, and in particular the vote split: 2-5-2 (50bps cut, 25bps cut, unch) is the modal consensus - and we flag that the baseline projections may become less
  useful as a communication tool going forward - and as such, less market relevant. EUR/GBP remains in a nascent uptrend, evident in the recovery from last Thursday's low. Key resistance and the bull trigger remains at 0.8769, the Jul 27 high.
• Focus Thursday turns to the ECB's economic bulletin, US weekly jobless claims and unit labor costs and the latest Chinese trade balance numbers. Fed's Bostic is due to be addressing monetary policy shortly after the BoE rate decision.  

• Date $MM Issuer (Priced *, Launch #)
• 08/06 $3B #Oneok $750M 7Y +103, $1B 10Y +122, $1.25B 30Y +147
• 08/06 $2.75B #BMW US $750M 2Y +50, $500M 2Y SOFR+71, $1B 5Y +75, $500M 10Y +100
• 08/06 $900M *American Water Capital 30Y +90
• 08/06 $700M Match Group 8NC3
• 08/06 $500M *PPL Electric WNG 30Y +77
• 08/06 $800M #Extra Space Storage +7Y +100
• Expected Thursday:
• 08/07 $1B Cloud Software Group 8NC3

• RES 4: 113-23   76.4% retracement of the Sep’24 - Jan’25 sell-off
• RES 3: 113-07   76.4% retracement of the Apr 7 - 11 sell-off 
• RES 2: 112-23   High May 1 
• RES 1: 112-15+ High Aug 5
• PRICE:‌‌ 112-03+ @ 18:39 BST Aug 6
• SUP 1: 110-19+/08+ Low Jul 24 / Low Jul 14 & 16        
• SUP 2: 110-03   76.4% retracement of the May 22 - Jul 1 bull leg
• SUP 3: 109-28   Low Jun 6 and 11
• SUP 4: 109.25   Low May 27

Treasury futures remain strong on the back of the post-NFP rally - barring an erratic and quickly reversed intraday slip. Having cleared resistance into the bull trigger at 112-12+, the Jul 1 high, Treasuries have opened the May 1 high for direction at 112-23, a multi-month high. Clearance here opens retracement levels layered between 113-07 and 113-23. On the downside, key support is 110-08+, the Jul 14 and 16 low. First support lies at 110-19+, the Jul 24 low.