EGB OPTIONS: Bund call spread
Oct-24 10:27
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US TSYS: Yesterday’s Recovery Rally Unwinds, Curves Steepen To Fresh ’24 Highs
Sep-24 10:26
Tsys lower during pre-NY hours as a Chinese monetary easing package weighed on bonds, while driving a rally in equities and oil.
- The latest round of Chinese policymaker support aims to stimulate domestic demand and promote the achievement of the country’s annual growth target.
- Much of Monday’s second-half rally (driven by heightened risk surrounding Israel & Lebanon) has been unwound.
- TY last -0-10+ at 114-14, 0-01+ off lows.
- Yesterday’s base (114-11+) protects the Sep 4 low (114-00+).
- Bulls need to retake the Sep 19 high (115-02+) to start to reassert their control.
- Yields 1-5bp higher, curve bear steepens.
- 2s10s hit a fresh cycle high at 19.2bp, 5s30s did the same, printing 60.6bp.
- On the data front, regional Fed activity indicators and various house price indices will be released today.
- We will get comments from hawkish Fed dissenter Bowman, although we don’t think we will get much new there, as the detailed explanation of her dissent has already been provided.
- $69bln of 2-Year Tsy supply will also have to be digested.
OUTLOOK: Price Signal Summary - Sell-Off In Gilts Exposes Key Support
Sep-24 10:21
- In the FI space, Bund futures continue to trade below their recent highs. The latest move down - a correction - has resulted in a breach of the 20-day EMA. This continues to signal scope for a deeper retracement near-term, potentially towards the 50-day EMA, at 133.63. Clearance of this average would undermine a bullish theme. For bulls, a reversal higher would refocus attention on key resistance and the bull trigger at 135.66, the Aug 5 high.
- A bull cycle in Gilt futures remains intact, however, the sell-off that started Sep 7, highlights a corrective phase and this week’s move lower suggests potential for a continuation near-term. Support at 98.92, 76.4% of the Sep 2 - 17 bull leg, has been cleared and this strengthens the current bearish theme. The break exposes the key support at 98.11, the Sep 2 low. For bulls, a reversal higher would refocus sights on 101.54, Sep 17 high. Initial resistance is at 99.88, the 20-day EMA.
LOOK AHEAD: LOOK AHEAD: Tuesday Data Calendar: Fed Speak, House$ Index, 2Y Sale
Sep-24 10:18
- US Data/Speaker Calendar (prior, estimate)
- Sep-24 0830 Philadelphia Fed Non-Mfg Activity (-25.1, -9.3)
- Sep-24 0900 Fed Gov Bowman moderated Q&A banker conf (text)
- Sep-24 0900 FHFA House Price Index MoM (-0.1%, 0.2%)
- Sep-24 0900 S&P CoreLogic CS 20-City MoM SA (0.42%, 0.40%)
- Sep-24 0900 S&P CoreLogic CS US HPI YoY NSA (5.42%, --)
- Sep-24 0900 S&P CoreLogic CS 20-City YoY NSA (6.47%, 5.90%)
- Sep-24 1000 Conf. Board Consumer Confidence (103.3, 104.0)
- Sep-24 1000 Conf. Board Present Situation (134.4, --)
- Sep-24 1000 Conf. Board Expectations (82.5, --)
- Sep-24 1000 Richmond Fed Mfg. Index (-19, -12)
- Sep-24 1000 Richmond Fed Business Conditions (-13, --)
- Sep-24 1130 US Tsy $60B 42 Day CMB auction
- Sep-24 1300 US Tsy $69B 2Y Note auction (91282CLP4)
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