GBP: Cable Consolidates at 1.3500, JPM on Potential Bullish Trend Exhaustion

• In similar vein to the Yen moves, the Swiss Franc is seeing pronounced losses today following the moderation in China-U.S. trade tensions. USDCHF rallied as much as 1.85% with topside momentum underpinned by a break back above the key 0.8333 level, the 2023 low and prior breakdown point.
• The move substantially narrowed the gap to an important resistance for USDCHF, which stands at 0.8485, the 50-day EMA. A break of this average would signal scope for a recovery towards 0.8578, the April 10 high, while the ‘liberation day’ breakdown level remains much further out at 0.8758.
• While not the primary driver of the CHF turnaround, it is worth highlighting the most recent comments from SNB President Schlegel on Franc strength will be providing an additional impulse to the cross/CHF recovery. As such, EURCHF finds itself towards the top end of its 0.9300/0.9400 range seen across May so far.
• While US Treasury Secretary Bessent confirmed today that Switzerland (alongside the UK) has moved to the "front of the queue" for a trade deal with the US following similar rhetoric from the Swiss government Friday, President Trump has announced a major executive order limiting US healthcare spending to be signed during US morning hours; policies hitting the Swiss pharmaceutical sector could further weigh on the CHF throughout Monday’s session.

• "The EU has mandated Barclays, Credit Agricole CIB, LBBW, Morgan Stanley and Nordea as Joint Lead Managers for its upcoming EUR Fixed Rate RegS Bearer new 20-year benchmark due 12th October 2045. No further group."
• "The transaction will be launched tomorrow, subject to market conditions. Joint Lead Managers will be paid a fee in connection to the transaction.”
• This is in line with MNI's expectations and we pencil in a wide E5-9bln range for the transaction size.

The latest CFTC CoT report pointed to continued extension of exposure for both asset managers and leveraged funds through May 6.

• The former extended their net long position by ~$11mln in DV01 equivalent terms, as they added to longs in FV through US futures, while they trimmed lightened long exposure in TU & WN contracts.
• Meanwhile, leveraged funds added ~$20.4mln DV01 equivalent across the curve, only trimming short exposure in TU futures. Note that they added ~$13mln DV01 equivalent of fresh net shorts in TY futures alone.
• Broader non-commercial net positioning remains net short across the curve.

Source: MNI - Market News/CFTC/Blooomberg