USDCAD TECHS: Bullish Theme

• RES 4: 93.13 76.4% retracement of the Jul 1 - 18 bear leg     
• RES 3: 93.08 1.0% 10-dma envelope
• RES 2: 93.00 Round number resistance
• RES 1: 92.84 High Aug 5
• PRICE: 91.96 @ Close Aug 8
• SUP 1: 91.87 Low Aug 8
• SUP 2: 91.44/08 Low Aug 1 / 18 and the bear trigger
• SUP 3: 90.97 76.4% retracement of the May 22 - Jul 1 bull leg  
• SUP 4: 90.59 Low May 29       

Gilt futures traded higher again mid-week, but faltered into the Friday close, finishing below the 20-day EMA as a result. On the downside, key support and the bear trigger has been defined at 91.08, the Jul 18 low. Recent gains, however, saw prices breach resistance at 92.15, the Jul 22 high as well as 92.74, the 61.8% retracement of the Jul 1 - 18 bear leg. The 76.4% retracement is at 93.13. 

Modest positive bias for European equity index futures this morning, with some pointing to reports flagging advances in U.S.-Russia discussions surrounding a Russia-Ukraine ceasefire (despite Ukraine’s clear objections to some of the touted suggestions):

• Euro Stoxx 50 futures: +0.31%
• Dax futures: +0.31%
• CAC 40 futures: +0.23%
• FTSE MIB futures: +0.22%
• FTSE 100 futures: +0.15%
• SMI futures: +0.64%

• Bund futures are up 5 ticks at 129.78, paring a little of Friday’s selloff. While the contract moved back below the 130.00 handle of Friday, the bear trigger and notable support at 128.84 (July 25 low) was not tested.
• Cash Treasuries were closed overnight due to a Japanese public holiday. UST yields are 1-2bps lower at typing. Fed Governor (and recent dissenter) Bowman said she looks for three rate cuts this year.
• Weekend news flow centred around this week’s Trump-Putin talks in Alaska. Ukrainian President Zelensky has pushed back against the idea of land concessions in any peace deal with Russia.
• On tariffs, the US-China tariff truce is set to expire tomorrow. Focus will be on whether another 90-day pause is confirmed. Meanwhile, Nvidia and AMD agreed to pay the US Govt 15% of revenues from chip sales to China.
• German yields are up to 1bp lower, with the curve very lightly bull flattening. The 10-year yield met resistance around the 2.70% level on Friday. 10-year EGB spreads to Bunds are up to 0.5bps wider to start the week.
• This week sees just E6.5bln of scheduled EGB supply, but E49.3bln of redemptions and E6.3bln of coupon payments. This may provide latent support to the space through the week.
• Today’s regional data calendar is very light, with only Italian final July inflation and June trade balance data to note.