EMERGING MARKETS: CEEMEA FX Price Signal Summary - USDZAR Support Remains Intact
Aug-23 11:07
- USDZAR remains in an uptrend and the latest pullback is considered corrective - for now. Resistance at 19.1533, the Jul 7 high, was breached last week. This reinforces current bullish conditions and opens 19.3301, 76.4% of the Jun 1 - Jul 27 downleg. A break of this level would open 19.50 and 19.9204, the Jun 1 high. Initial firm support lies at 18.5983, the 50-day EMA. Clearance of this level would expose 18.3828, the Aug 4 low.
- The path of least resistance in USDTRY is unchanged and remains up. The recent recovery highlights a continued acceleration of the uptrend. The 26.00 objective has been cleared and the focus is on 28.00 next. The 20-day EMA at 26.8354 represents the first key support.
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US 10YR FUTURE TECHS: (U3) Pullback Appears To Be A Correction
Jul-24 11:07
- RES 4: 114-06+ High Jun 6
- RES 3: 114-00 High Jun 13
- RES 2: 113-08 High Jul 18 and the short-term bull trigger
- RES 1: 113-06 50-day EMA and a key resistance point
- PRICE: 112-14 @ 11:53 BST Jul 24
- SUP 1: 112-00 Low Jul 20
- SUP 2: 111-22+ 50.0% retracement of the Jul 7 - 18 rally
- SUP 3: 111-11 61.8% retracement of the Jul 7 - 18 rally
- SUP 4: 110-05 Low Jul 6 and the bear trigger
Treasuries turned lower last Thursday. The pullback for now, appears to be a correction, rather than a full reversal. Initial support lies at 112-00, the Jul 20 low. A break of this level would signal scope for a deeper retracement and open 111-22+ initially, a Fibonacci retracement point. For bulls, clearance of last week’s 113-08 high (Jul 18), would resume the recent bull cycle and expose 114-00, the Jun 13 high.
US TSYS: Modest Belly- To Long-Led Rally On Softer European PMIs
Jul-24 11:02
- Cash Tsys hold a modest rally, triggered by softer than expected European PMIs with the reaction led by 5-10Y tenors. 2s underperform with some relative stickiness ahead of Wednesday’s FOMC decision (implied rates out to Dec are unchanged on the day) along with today’s 2Y auction.
- 2YY -0.6bp at 4.831%, 5YY -3.2bp at 4.061%, 10YY -2.9bp at 3.805%, 30YY -1.7bp at 3.880%.
- TYU3 trades just half a tick off session highs of 112-14+ (+00-7) under subdued volumes of 225k. It has cleared Friday’s high but is well within Thursday’s range that was helped wider by initial claims coming in lower than expected. Support remains at 112-00 (Jul 20 low) whilst last week's 113-08 high is watched for a resumption of the recent bull cycle that could ultimately expose 114-00 (Jun 13 high).
- The combination of preliminary OI data and price action indicated that TU futures saw fresh shorts added, while FV, TY, UXY & US futures saw shorts cut.
- Data: Chicago Fed Nat Activity Index Jun (0830ET), S&P Global US PMIs Jul prelim (0945ET)
- Note/bond issuance: US Tsy $42B 2Y Note auction, (91282CHN4) – 1300ET
- Bill issuance: US Tsy $65B 13W, $58B 26W Bill auctions – 1130ET
STIR: SOFR OI Suggests Short Cover Dominated In Whites On Fri, While Reds Saw Fresh Shorts Set
Jul-24 10:36
The combination of price action and preliminary open interest data indicate that Friday saw short cover in SFRM3 through SFRZ3, while SFRH4 saw fresh shorts added. The reds & greens saw a mix of long cover and fresh shorts added. Meanwhile, the blues saw a mix of short additions, short cover, longs added and long cover.
- A reminder that the front end of the whites and the back end of the blues firmed on Friday, while the remainder of the strip covered above cheapened, with net changes of -3.5bp to +1.0bp observed.
| 21-Jul-23 | 20-Jul-23 | Daily OI Change | Daily OI Change In Packs | ||
| SFRM3 | 1,110,857 | 1,115,310 | -4,453 | Whites | -12,661 |
| SFRU3 | 1,108,823 | 1,109,905 | -1,082 | Reds | +13,765 |
| SFRZ3 | 1,305,039 | 1,323,584 | -18,545 | Greens | -332 |
| SFRH4 | 848,610 | 837,191 | +11,419 | Blues | +619 |
| SFRM4 | 773,816 | 777,243 | -3,427 | ||
| SFRU4 | 749,634 | 742,862 | +6,772 | ||
| SFRZ4 | 760,571 | 751,151 | +9,420 | ||
| SFRH5 | 537,312 | 536,312 | +1,000 | ||
| SFRM5 | 466,059 | 468,809 | -2,750 | ||
| SFRU5 | 405,806 | 403,484 | +2,322 | ||
| SFRZ5 | 328,761 | 329,125 | -364 | ||
| SFRH6 | 235,800 | 235,340 | +460 | ||
| SFRM6 | 178,753 | 177,618 | +1,135 | ||
| SFRU6 | 144,038 | 144,106 | -68 | ||
| SFRZ6 | 171,658 | 174,168 | -2,510 | ||
| SFRH7 | 119,900 | 117,838 | +2,062 |
