EU CREDIT SUPPLY: CIBC € B'mark 6NC5 Sr Bail-in - Final Spread

OI data points to net short setting dominating in 7 of the front 8 SOFR futures on Friday, before positioning swings became a little more balanced between net short setting and long cover further out the strip

• A reminder that the NFP data and news of an impending Sino-U.S. meeting on trade maters drove much of the hawkish repricing seen in the U.S. short end ahead of the weekend. SFRZ5 got within 2.5bp of its May lows.

Source: MNI - Market News/Bloomberg Finance L.P.

• Treasuries are modestly firmer after the weekend, holding the majority Friday’s sell-off on a somewhat solid payrolls report that defied a dovish build-up to the release from other downside surprises elsewhere.
• The US and China are set to resume trade talks in London today, focusing on rare earth minerals and advanced technology after last week’s Trump-Xi call. Just the fact that call had gone ahead saw a fixed income sell-off last week.
• As for potential headline timings, Trump participates in an Invest America Roundtable at 1400ET with the White House press pool.
• Cash yields are 2-3bp lower on the day. That includes 10Y yields at 4.4817% having eased back from Friday’s latest clearance of 4.50% with a high of 4.5116%.
• Curves are a little off Friday’s post-payrolls flats, with 2s10s at 47.6bp (+0.3bp) and 5s30s at 85.8bp (+0.7bp).
• TYU5 trades at 110-03 (+ 06) having slowly climbed a little further off Friday’s 109-28, with low cumulative volumes of 250k.
• A bearish threat is present, with support seen at 109-26 (May 29 low) before the bear trigger at 109-12+ (May 22 low). Resistance meanwhile is seen at 110-20+ (50-day EMA) with a key short-term level at 111-14+ (Jun 5 high & 61.8% of May 1-22 downleg) required to be cleared for a more bullish trajectory.
• Data: Wholesale inventories/sales Apr F/Apr (1000ET), NY Fed inflation expectations May (1100ET)
• Bill issuance: US Tsy $76B 13W & $68B 26W bill auctions (1130ET)

• In FX, EURUSD is holding on to the bulk of its recent gains. The breach of 1.1419, the May 26 high, confirmed a resumption of the trend and has opened 1.1573, the Apr 21 high and bull trigger. Moving average studies are in a bull-mode position, highlighting a dominant uptrend. Support to watch lies at 1.1216, the 50-day EMA. A clear break of this average would undermine the bull theme. Initial support is at 1.1334, the 20-day EMA.
• Trend signals in GBPUSD are unchanged and remain bullish. Last week’s fresh cycle high, confirms a resumption of the uptrend and an extension of the price sequence of higher highs and higher lows. This opens 1.3681 next, the 1.500 projection of the Feb 28 - Apr 3 - 7 price swing. Initial support to watch lies at 1.3453, the 20-day EMA. A clear break of this average would suggest potential for a deeper correction and expose the 50-day EMA, at 1.3288.
• Recent gains in USDJPY are considered corrective and the trend condition remains bearish. Attention is on the next important support at 142.12, the May 27 low. A clear break of this level would confirm a resumption of the bear leg and open 139.89, the Apr 22 low. Moving average studies remain in a clear bear-mode position too, highlighting a dominant downtrend. Key short-term resistance has been defined at 146.28, the May 29 high.