US: Corporate Credit Update: Holding Pattern
Investment-grade corporate credit risk running marginally higher at the moment, lower half of range as major stock indexes trading mildly weaker after midday: SPX eminis trading -3.5 (-0.1%) at 3830.5; DJIA -74.25 (-0.24%) at 30893.34; Nasdaq -7.8 (-0.1%) at 11314.81.
- Investment grade risk measured by Markit's CDXIG5 index at 99.802 (+0.707); CDXHY5 high yield index at 97.379 (-0.097).
- Outperforming credit sectors (tighter or least wide): Financials subordinated and Sr (-2.6) Technology, Communications and Health Care all (-2.1)
- Lagging sectors (wider or least narrow): Energy (-0.4), Utilities (-0.6) and Industrials (-1.0).
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US TSY FUTURES: BLOCK, 10Y Ultra-Bond Sale
- -4,328 UXYU2 126-16.5 (-25), sell through 126-17.5 post-time bid at 1254:58ET, 126-15 last
EURUSD TECHS: Still Trading Below The Bear Channel Top
- RES 4: 1.0954 High Apr 11
- RES 3: 1.0936 High Apr 21 and a key resistance
- RES 2: 1.0852 High Apr 22
- RES 1: 1.0769/87 Bear channel top from Feb 10 high / High May 30
- PRICE: 1.0704 @ 15:30 BST Jun 6
- SUP 1: 1.0627/0533 Low Jun 1 / Low May 20
- SUP 2: 1.0461 Low May 18 and19
- SUP 3: 1.0350 Low May 13 and bear trigger
- SUP 4: 1.0341 Low Jan 3 2017 and a key support
EURUSD has stabilised and is trading closer to its recent highs. Attention remains on a key short-term resistance and the top of a bear channel drawn from the Feb 10 high. Channel resistance intersects at 1.0769 today and a break would strengthen bullish conditions and highlight a stronger short-term reversal. Note that the primary trend remains down. An extension lower would reinforce this theme and open 1.0533 initially, May 20 low.
OPTIONS: Euribor Put Spread Trade Eyes Big ECB Hikes
Monday's Europe bonds/rates options included:
- RXN2 149.5/149ps, bought for 21.5 in 5.25k
- OEQ2 122/126 combo, bought the put for 5 in 12.5k
- ERZ2 98.62/98.25ps 1x1.25ps, bought for 5.5 in 22.5k. Going for 150bps of hikes
- 0RM2 98.25p, bought for 6 in 13.3k (ref 98.275, 44% del)
