EQUITY TECHS: E-MINI S&P: (U5) Corrective Pullback Extends
- RES 4: 6523.63 1.764 proj of the May 23 - Jun 11 - 23 price swing
- RES 3: 6500.00 Round number resistance
- RES 2: 6477.31 1.618 proj of the May 23 - Jun 11 - 23 price swing
- RES 1: 6468.50 High Jul 31
- PRICE: 6311.25 @ 10:26 BST Aug 1
- SUP 1: 6304.50 Intraday low
- SUP 2: 6288.25 Low Jul 17
- SUP 3: 6241.00 Low Jul 16
- SUP 4: 6189.50 50-day EMA
The trend set-up in S&P E-Minis remains bullish and short-term weakness is considered corrective. Note that the contract has traded through support at the 20-day EMA, at 6336.64. The breach signals scope for a deeper retracement and opens the 50-day EMA at 6189.50. Clearance of this average is required to signal a stronger reversal. The primary trend remains up, key short-term resistance and the bull trigger is 6468.50, the Jul 31 high.
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EGBS: Bund Futures Pressured By 10-year Supply and UST Spillover
The combination of this morning’s 10-year supply alongside negative spillovers from US Treasuries has weighed on Bund futures, now -35 ticks at 130.14 (albeit off lows of 130.08). Futures remain above Monday’s low (130.00) for now, but a bearish threat is present and a clear move below prior support at 130.12 would highlight this threat, undermine the recent bullish theme, and signal scope for an extension lower.
- Germany sold E6bln of the new 10-year 2.60% Aug-35 Bund this morning. Demand metrics were a bit softer than the last auction of the previous on-the-run line, but the reaction in Bund futures was contained.
- The German curve has bear steepened (note: 10-year yields are skewed higher owing to a BBG benchmark roll), with Schatz yields up 1bp and 30-year Bund yields up 3.5bps.
- 10-year EGB spreads to Bunds are biased a little wider, but remain within 1bp of yesterday’s closing levels. French PM Bayrou survived a no-confidence vote last night – as expected.
- This morning’s Eurozone data hasn’t been market moving. The Italian unemployment rate surprisingly jumped to 6.5% (vs an upwardly revised 6.1% prior), which also pushed the Eurozone-wide reading a tenth above consensus to 6.3%.
- Further commentary from the ECB’s Sintra forum will be eyed, particularly in relation to recent exchange rate moves. The MNI Policy Team released an interview with Bank of Portugal Governor Centeno this morning.
EQUITIES: Estoxx Call Spread
{eu} SX5E (15th Aug) 5550/5700cs, bought for 15.5 in 4k.
GERMAN AUCTION RESULTS: New 2.60% Aug-35 Bund
| 2.60% Aug-35 Bund* | Previous | |
| ISIN | DE000BU2Z056 | DE000BU2Z049 |
| Total sold | E6bln | E3bln |
| Allotted | E4.557bln | E2.336bln |
| Avg yield | 2.63% | 2.54% |
| Bid-to-offer | 1.24x | 2.09x |
| Bid-to-cover | 1.63x | 2.69x |
| Avg Price | 99.77 | 99.63 |
| Low Price | 99.76 | 99.63 |
| Pre-auction mid | 99.597 | |
| Previous date | 11-Jun-25 |
