USDJPY TECHS: Continues To Appreciate
- RES 4: 141.61 High Nov 23 2022
- RES 3: 140.66 Bull channel top drawn from the Jan 16 low
- RES 2: 140.00/12 round number resistance / 2.0% 10-dma envelope
- RES 1: 139.89 High Nov 30 2022
- PRICE: 139.65 @ 06:46 BST May 25
- SUP 1: 138.23 Low May 24
- SUP 2: 137.77 High May 2 and a recent breakout level
- SUP 3: 136.59 20-day EMA
- SUP 4: 135.69 Low May 16
USDJPY bullish conditions remain intact and the pair continues to appreciate. Sights are on the 140.00 handle and a key resistance at 140.66, the top of a bull channel drawn from the Jan 16 low. Moving averages are in a bull mode position and this highlights the current positive sentiment. On the downside, initial support lies at 137.77, the May 2 high. A short-term pullback would be considered corrective.
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EUROZONE ISSUANCE: EGB Supply
The EU, Germany, Italy and Finland all still look to sell bonds this week while Belgium has already come to the market. We pencil in gross nominal issuance of E32.4bln from announced operations, down from E47.5bln last week.
- There is an EU-bond syndication scheduled for Tuesday with a new long 15-year EU-bond with a maturity of 4 October 2038 to be launched. We pencil in a E5-6bln transaction size.
- Germany has also announced a mandate for a new 10-year 2.30% Feb-33 Green Bund to be held in the “near future” (we expect Tuesday). We pencil in a transaction size of E4-5bln. Germany’s 2023 funding plan included two green syndications this year: a 10-year transaction and a longer-maturity transaction.
- Germany will also hold a Tuesday auction with E6bln of the new 2.80% Jun-25 Schatz (ISIN: DE000BU22015) on offer.
US TSYS: A Touch Firmer As Europe Files In
TYM3 sees an extension through the previously outlined early Asia-Pac peak, but still holds to a fairly limited 0-07 range, last +0-12 at 115-08, at fresh session bests. Meanwhile cash Tsys are 1.5-3.0bp richer across the curve, with intermediates still leading there. There hasn’t been anything in the way of fresh headline catalysts, with swifter than expected deposit outflow from First Republic (albeit with apparent “stabilsation” of that situation in recent times), a heavy session for Chinese tech equities (which have extended lower in recent trade) and rhetoric out of Russia re: heightened chances of direct conflict with the U.S. at the fore as European traders begin to settle in for Tuesday trade.
EUROSTOXX50 TECHS: (M3) Bull Cycle Remains In Play
RES 4: 4520.00 High June 2001 (cont)
- RES 3: 4403.50 High Nov 18 2021 (cont) and a major resistance
- RES 2: 4381.50 High Jan 5 2022 (cont)
- RES 1: 4363.00 High Apr 21
- PRICE: 4338.00 @ 06:23 BST Apr 25
- SUP 1: 4309.00 Low Apr 17
- SUP 2: 4274.00 20-day EMA
- SUP 3: 4196.90 50-day EMA
- SUP 4: 4095.00 Low Mar 28
The Eurostoxx 50 futures uptrend remains intact and the contract is trading at its recent highs. The recent extension reinforced the bullish significance of the break of 4268.00, Mar 6 high and a former key resistance. The move confirmed a resumption of the uptrend and maintains the price sequence of higher highs and higher lows. Sights are on 4381.50, Jan 5 2022 high (cont). Initial firm support lies at 4274.00, the 20-day EMA.
