CHINA: Country Wrap: Electricity Consumption Records Steady Growth

• RES 4: 117.710 High Aug 5 and a key resistance    
• RES 3: 117.640 High Aug 7 
• RES 2: 117.488 50-day EMA 
• RES 1: 117.410 High Aug 21
• PRICE: 117.230 @ 05:59 BST Aug 25
• SUP 1: 116.950 Low Aug 15   
• SUP 2: 116.840 1.00 proj of the Jun 13 - Jul 11 - 22 price swing  
• SUP 3: 116.800 Low Mar 17 (cont) 
• SUP 4: 116.637 76.4% retracement of the Mar 6 - Apr 7 bull leg (cont)

A bearish theme in Bobl futures remains intact. A strong sell-off on Aug 15 highlights the bearish threat and moving average studies are in a bear-mode position. The contract has pierced support at 116.970, the Jul 25 low and a bear trigger. A clear breach of this level would set the scene for an extension towards 116.840, a Fibonacci projection. Key short-term resistance is 117.488, the 50-day EMA.

• RES 4: 1.1851 High Sep 10 2021
• RES 3: 1.1829 High Jul 01 and the bull trigger 
• RES 2: 1.1789 High Jul 24 
• RES 1: 1.1743 High Aug 22
• PRICE: 1.1703 @ 06:10 BST Aug 25
• SUP 1: 1.1596/1.1528 50-day EMA / Low Aug 5 
• SUP 2: 1.1392 Low Aug 1 and bear trigger 
• SUP 3: 1.1373 Low Jun 10 
• SUP 4: 1.1313 Low May 30 

The trend set-up in EURUSD remains bullish and Friday’s rally reinforces current conditions. Support at the 50-day remains intact, at 1.1596. A clear break of it would signal scope for a deeper retracement and potentially expose key support at 1.1392, the Aug 1 low. For bulls, a stronger resumption of gains would open key resistance and the bull trigger at 1.1829, the Jul 1 high.

JGB futures are little changed, -1 compared to settlement levels, after giving up Friday's overnight gains.

• (Bloomberg) Bank of Japan Governor Kazuo Ueda said he expects a tight labour market to keep upward pressure on wages, reflecting his view that stable inflation is set to take hold.
• "Wage growth is spreading from large enterprises to small and medium enterprises," Ueda said Saturday in remarks at the Federal Reserve's annual symposium in Jackson Hole, Wyoming. "Barring a major negative demand shock, the labour market is expected to remain tight and continue to exert upward pressure on wages."
• Joseph Wang on X: "Good speech by Ueda on how Japan's ageing demographics are driving up wages. Increasing participation rates and retiring at a later age have reached their limits. It looks like the theory that ageing demographics is inflationary will be validated. https://t.co/YyW7JcMySw"
• Cash US tsys are ~2bps cheaper in today's Asia-Pac session after Friday's strong rally.
• Cash JGBs are flat to 1bp richer across benchmarks. The benchmark 10-year yield is 0.8bp lower at 1.617% versus the cycle high of 1.627%, set last week.
• Swap rates are ~2bps higher. Swap spreads are wider.
• Tomorrow, the local calendar will see PPI Services alongside an Auction for Enhanced-Liquidity 15.5-39 YR.