EGBS: Bund Rally Falters, But S/T Support Remains
Oct-17 07:08
- A very busy overnight session for both Bunds and Treasuries on above average volumes - a pattern that's persisting through the European open. Yields across EGBs and Treasuries continue to fall, with the US 10y yield resolving a break below the long-held 4.00% support. Bunds gapped higher, but futures have managed to close the gap through the cash open, down to 130.36.
- Well over 200k lots traded in T-notes as the 10yr Yield tests through the 3.95% level, having printed a 3.9364% low. For now, TYZ5 is finding some resistance at 114.00.
- Given that OATs rallied to 123.72 overnight, the 10yr yield should be quoted close or at the 3.30% level, which equated to 123.71 Yesterday.
- DATA: The EU Final CPI is the only notable release for the Day.
SPEAKERS: BoJ's Uchida, BoE's Pill, Greene & Breeden, ECB's Nagel, Rehn and Fed's Musalem.
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Historical bullets
GILTS: Opening calls
Sep-17 06:57
- Gilt calls, 91.45/91.50.
These DO NOT take the CPI into account, given that Sonia is a tick up, small upside risk, but should be close.
USDCAD TECHS: Strong Sell-Off Exposes Support
Sep-17 06:57
- RES 4: 1.4019 38.2% retracement of the Feb 3 - Jun 16 bear leg
- RES 3: 1.3925 High Aug 22 and the bull trigger
- RES 2: 1.3890 High Sep 11
- RES 1: 1.3803 20-day EMA
- PRICE: 1.3751 @ 07:56 BST Sep 17
- SUP 1: 1.3727 Low Aug 29 and a bear trigger
- SUP 2: 1.3709 61.8% retracement of the Jul 23 - Aug 22 bull cycle
- SUP 3: 1.3658 76.4% retracement of the Jul 23 - Aug 22 bull cycle
- SUP 4: 1.3637 Low Jul 25
A sharp sell-off in USDCAD this week has resulted in a break of the 20-and-50-day EMAs. This undermines a recent bullish theme and a continuation lower would expose key short-term support at 1.3727, the Aug 27 low. A break of this level would strengthen a bearish threat. For bulls, resistance levels to watch are; 1.3890, the Sep 11 high, and 1.3925, the Aug 22 high and bull trigger.
US TSY OPTIONS: TYX5 112.50 Puts Lifted
Sep-17 06:54
TYX5 112.50 puts paper paid 0-21 on 4K.
