EQUITIES: EU Bank option

• RES 4: 1.3300 High Nov 4 2020
• RES 3: 1.3192 1.00 proj of the Apr 5 - May 12 - Jun 8 price swing
• RES 2: 1.3113 High Nov 23 2020
• RES 1: 1.3084 High Jul 5
• PRICE: 1.2945 @ 16:15 BST Jul 8
• SUP 1: 1.2936 Low Jul 8
• SUP 2: 1.2904 20-day EMA
• SUP 3: 1.2836/19 50-day EMA / Low Jun 28 and key support
• SUP 4: 1.2763 Low Jun 13

USDCAD remains bullish despite Friday’s pullback. The pair rallied sharply higher earlier in the week and this reinforced S/T bullish conditions. Key support around the 50-day EMA has remained intact - the average intersects at 1.2836. Tuesday’s gains resulted in a print above resistance at 1.3079, the May 17 high and a bull trigger. A clear break would strengthen bullish conditions and open 1.3113, Nov 23 2020 high. A break of support at 1.2819, Jun 28 low, would alter the picture.

Tsy futures broadly weaker after the bell, yld curves marginally steeper w/ long end underperforming after stronger than estimated June employ report +372k vs. +268k est, net revisions for April/May decline 74k.

• Strong data underscored a 75bp hike at end of month while markets got a little carried away pricing in small chance of 100bp hike (<5%) before moderating the move in the first half (balance of White pack (EDZ2-EDH3 currently -0.085-0.100 vs. -0.100-0.170 lows).
• New York Fed President John Williams said Friday he's revised down his expectations for U.S. economic growth and now expects the unemployment rate to rise past 4% next year as the central bank remains resolutely focused on restoring price stability. Williams later went on to say 75-50bps rate hike at the end of this month is the "right positioning" amid "sky high" inflation.
• Atlanta Fed Bostic was "fully supportive" over a second consecutive 75bps hike in July, confident the move would not hurt the economy.

Investment-grade corporate credit risk continues to ebb in late Friday trade, investment grade debt risk at four week lows as stocks hold late gains: SPX eminis currently trading +8.5 (0.22%) at 3913.25; DJIA +69.55 (0.22%) at 31453.82; Nasdaq +21.4 (0.2%) at 11642.66.

• Investment grade risk measured by Markit's CDXIG5 index slips to the lowest level since June 10 at 90.940 (-2.072); CDXHY5 high yield index at 99.197 (+0.294).
• Outperforming credit sectors (tighter or least wide): subordinated Financials (-5.6), Health Care (-5.4), Consumer Staples (-5.1) and Financials Sr (-5.0).
• Lagging sectors (wider or least narrow): Energy (-3.6), Utilities (-3.8) Industrials (-4.2).