JGBS: Cheaper Led By 7-10Y, 40YY Sets Record High

• RES 4: 107.835 2.000 retracement proj of the Mar 4 - 6 bear leg     
• RES 3: 107.800 Round number resistance    
• RES 2: 107.775 High Apr 7 and the bull trigger  
• RES 1: 107.660 Intraday high                   
• PRICE: 107.610 @ 05:53 BST Apr 9     
• SUP 1: 107.235 Low Apr 7   
• SUP 2: 107.120 High Mar 4 and a recent breakout level     
• SUP 3: 107.005 20-day EMA     
• SUP 4: 106.830 Low Mar 27     

Schatz futures maintain a firmer tone and the contract is trading closer to its recent highs. Price has recently traded through a key resistance at 107.120, the Mar 4 high. This confirmed a full reversal of the Apr 3 - 6 impulsive sell-off. The break also highlights a stronger bull cycle and signals scope for a climb towards 107.800 next. Initial firm support is seen at 107.005, the 20-day EMA. 

• RES 4: 1.3274 High Oct 3 ‘24  
• RES 3: 1.3207 High Apr 3 and the bull trigger   
• RES 2: 1.3017 61.8% retracement of the Apr 3 - 7 sell-off
• RES 1: 1.2899 38.2% retracement of the Apr 3 - 7 sell-off      
• PRICE: 1.2853 @ 06:01 BST Apr 9
• SUP 1: 1.2709 Low Apr 7
• SUP 2: 1.2654 50.0% retracement of the Jan 13 - Apr 3 bull cycle 
• SUP 3: 1.2652 2.0% 10-dma envelope
• SUP 4: 1.2559 Low Feb 28 

GBPUSD traded sharply lower Monday but is recovering from this week’s low. For now, the recent sell-off appears corrective. Price has traded below the 50-day EMA - a concern for bulls - however, MA studies remain in a bull mode position and this highlights a dominant uptrend. A continued recovery would open 1.2899 and 1.3017, Fibonacci retracement points. A move through Monday's 1.2709 low, would signal scope for a deeper retracement.

TYM5 is 110-12, +1-02 from closing levels in today's Asia-Pac session.

• Cash US tsys have extended yesterday's decline during the Asia-Pac session. The sell-off reflects growing concerns that China may retaliate against tariffs by offloading US assets, including US tsys.
• Alongside the steepening of the curve, interest-rate swaps have extended their recent extreme outperformance of US tsy securities as traders sought to avoid costs associated with holding bonds.
• Cash US tsys are currently trading 2-17bps cheaper across benchmarks, with the curve steeper.
• Yesterday, Trump officials confirmed the 104% tariff on China went into effect at noon. Concurrently, China vowed to "fight to the end".
• On the local front, the focus turns to the March FOMC minute release at 1400ET today, CPI on Thursday and PPI on Friday morning.
• Reminder, banks kick off the latest earnings cycle this Friday with Bank of New York Mellon, Wells Fargo & Co, JPMorgan Chase and Morgan Stanley reporting.