EU CONSUMER CYCLICALS: El Corte Inglés: FINAL

OI data points to fairly non-committal trade for a second consecutive session, with net OI and DV01 equivalent swings fairly limited as geopolitical risk centred on the Middle East remained heightened on Monday.

• There was a mix of net short setting (FV, TY, UXY & WN) and long cover (TU & US) as contracts settled lower.
• The apparent net short setting in TY futures provided the only 7 figure DV01 equivalent net positioning move on the curve. 

• In FX, the trend set-up in EURUSD remains bullish and the pair continues to trade closer to its recent highs. A key resistance at 1.1573, the Apr 21 high, has been breached. This strengthens the bullish theme and confirms a resumption of this year's uptrend. Sights are on 1.1696 next, a 1.618 projection of the Feb 28 - Mar 18 - 27 price swing. Initial firm support is at 1.1419, the 20-day EMA. The 50-day EMA lies at 1.1278. Short-term weakness is considered corrective. Short-term weakness is considered corrective.
• GBPUSD bulls remain in the driver’s seat and the pair is trading closer to its recent highs. A rising price sequence of higher highs and higher lows, together with a bull set-up in moving average studies, highlights a dominant uptrend. Sights are on 1.3681 next, the 1.500 projection of the Feb 28 - Apr 3 - 7 price swing. Resistance at 1.3616, the Jun 5 high has been pierced - a bullish development. Support to watch lies at 1.3456, the Jun 10 low.
• USDJPY is trading in a range and remains below last week’s high. Recent weakness suggests the correction between Jun 3 - 11, is over. The trend direction is down - moving average studies are in a clear bear-mode position, highlighting a dominant downtrend. A resumption of weakness would open 142.12, the May 27 low. Key short-term resistance is 146.28, the May 29 high. First resistance is 145.46, Jun 11 high.

• Fed Funds implied rates are up to 2bp lower on the day for 2025 meetings but continue to hold little odds of a near-term Fed cut, with a next cut fully priced for October.
• US rates outperform European counterparts (e.g. SFRZ6 +2.5 ticks vs ERZ6 -2 ticks) in signs of some haven demand for US assets with Trump promising “bigger” and “better” than an Israel-Iran ceasefire on Truth Social and speaking to reporters on Air Force One.
• Cumulative cuts from 4.33% effective: 0bp for tomorrow, 3.5bp for Jul, 19bp Sep, 32bp Oct and 48.5bp Dec.
• The SOFR implied terminal yield of 3.295% (SFRZ6, -2.5bp) last closer lower on Thursday (Jun 12).
• Today sees data including retail sales and import prices for May (0830ET) before industrial production for May (0915ET). They provide important hard data updates for May heading into the two-day FOMC meeting starting today.  
• MNI Fed Preview: https://media.marketnews.com/Fed_Prev_Jun2025_With_Analysts_a9c8a317ff.pdf