CREDIT PRE-MARKET: EUR Market Wrap
- 2y/10y bunds closed -4bp/-6bp in a steady grind tighter across much of the session – DM team flagged the fall in commodity prices as the main driver with Euro consumer confidence coming in-line.
- Main/XO ended +0.5bp/+1bp at 53.4bp/293bp while €IG/€HY was -0.5bp/+0.5bp with Energy the only IG sector wider on the day. Energy remains the second best performer YTD, essentially flat to €IG with Fins the best performer at -13bp vs. the €IG index. Just the one IG deal from Mitsubishi in a EUR 500mn A3/A- WNG that tightened 30bp to price with a NIC of 5bp and a cover of 2.5x.
- SXXP ended +0.1% while SPX was -0.2% for WoW moves of -0.4% and -2%. €IG movers included SAP +7%, Sartorious +7%, GE +6%, Danaher +5%, Edenred -13%, UPS -12%, Paccar -11%, Thales -7%, GM -6%.
- SX5E and SPX futures are -0.5% and Asian markets are mostly lower today, following disappointing earnings from major tech companies. USTs have been a subdued trading day in Asia today, yields are flat to 1bps lower.
- Later the Fed’s Bowman and Logan give remarks and the ECB’s Buch, Lane and de Guindos appear. The Bank of Canada decision is also announced – a 25bp cut is forecast. In terms of data, US/European preliminary July PMIs and US June trade and new home sales are released.
| Date | GMT/Local | Impact | Country | Event |
| 24/07/2024 | 0600/0800 | * | DE | GFK Consumer Climate |
| 24/07/2024 | 0645/0845 | EU | ECB's de Guindos at ECB/IMF conference | |
| 24/07/2024 | 0700/0900 | ** | ES | PPI |
| 24/07/2024 | 0715/0915 | ** | FR | S&P Global Services PMI (p) |
| 24/07/2024 | 0715/0915 | ** | FR | S&P Global Manufacturing PMI (p) |
| 24/07/2024 | 0730/0930 | ** | DE | S&P Global Services PMI (p) |
| 24/07/2024 | 0730/0930 | ** | DE | S&P Global Manufacturing PMI (p) |
| 24/07/2024 | 0800/1000 | ** | EU | S&P Global Services PMI (p) |
| 24/07/2024 | 0800/1000 | ** | EU | S&P Global Manufacturing PMI (p) |
| 24/07/2024 | 0800/1000 | ** | EU | S&P Global Composite PMI (p) |
| 24/07/2024 | 0830/0930 | *** | UK | S&P Global Manufacturing PMI flash |
| 24/07/2024 | 0830/0930 | *** | UK | S&P Global Services PMI flash |
| 24/07/2024 | 0830/0930 | *** | UK | S&P Global Composite PMI flash |
| 24/07/2024 | 0900/1000 | ** | UK | Gilt Outright Auction Result |
| 24/07/2024 | 1100/0700 | ** | US | MBA Weekly Applications Index |
| 24/07/2024 | 1200/1400 | EU | ECB's Lane at ECB/IMF conference | |
| 24/07/2024 | 1345/0945 | CA | BOC Monetary Policy Report | |
| 24/07/2024 | 1345/0945 | *** | CA | Bank of Canada Policy Decision |
| 24/07/2024 | 1345/0945 | *** | US | S&P Global Manufacturing Index (Flash) |
| 24/07/2024 | 1345/0945 | *** | US | S&P Global Services Index (flash) |
| 24/07/2024 | 1400/1000 | *** | US | New Home Sales |
| 24/07/2024 | 1430/1030 | ** | US | DOE Weekly Crude Oil Stocks |
| 24/07/2024 | 1430/1030 | CA | BOC Governor Press Conference | |
| 24/07/2024 | 1530/1130 | ** | US | US Treasury Auction Result for 2 Year Floating Rate Note |
| 24/07/2024 | 1700/1300 | * | US | US Treasury Auction Result for 5 Year Note |
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EQUITY TECHS: E-MINI S&P TECHS: (U4) Northbound
- RES 4: 5622.69 2.764 proj of the Apr 19 - 29 - May 2 price swing
- RES 3: 5600.00 Round number resistance
- RES 2: 5594.66 2.618 proj of the Apr 19 - 29 - May 2 price swing
- RES 1: 5588.00 High Jun 20
- PRICE: 5533.25 @ 06:46 BST Jun 24
- SUP 1: 5452.35/5360.55 20- and 50-day EMA values
- SUP 2: 5267.75 Low May 31 and key support
- SUP 3: 5213.25 Low May 6
- SUP 4: 5155.75 Low May 3
The uptrend in S&P E-Minis remains intact and the contract continues to trade closer to its recent highs. Price has recently cleared 5430.75, the May 23 high and bull trigger. This confirmed a resumption of the uptrend. Note that moving average studies are in a bull-mode position too, highlighting positive market sentiment. Sights are on 5594.66 next, a Fibonacci projection. Initial support lies at 5452.35, the 20-day EMA.
BTP TECHS: (U4) Watching Resistance
- RES 4: 119.00 Round number resistance
- RES 3: 118.58 High May 16 and a key resistance
- RES 2: 117.62 High Jun 5 and key resistance
- RES 1: 117.09 High Jun 21
- PRICE: 116.40 @ Close Jun 24
- SUP 1: 115.28/114.35 Low Jun 12 / 11
- SUP 2: 114.02 1.236 proj of the May 16 - 29 - Jun 5 price swing
- SUP 3: 113.60 1.382 proj of the May 16 - 29 - Jun 5 price swing
- SUP 4: 112.77 61.8% of the Oct 19 - Dec 27 2023 rally (cont)
BTP futures have traded in a volatile manner recently. The latest bear reversal from the Jun 5 high, confirmed the end of the corrective phase between May 29 - Jun 5. This resulted in a break of key support at 115.54, Apr 25 low, highlighting a resumption of the downtrend. However, price has rebounded from the Jun 11 low of 114.35. Initial key resistance is 117.62, Jun 5 high. A break would be bullish. First resistance is 117.09, Friday’s high.
EUROZONE ISSUANCE: EGB Supply - W/C 24 June, 2024
- The EU will kick off issuance today by selling up to E2.5bln of the 2.75% Oct-26 EU-bond (ISIN: EU000A3K4D82) and up to E2.5bln of the 3.00% Dec-34 EU-bond (ISIN: EU000A3K4ES4).
- Italy tomorrow will look to hold a BTP Short Term and BTPei auction. On offer will be E2.0-2.5bln of the on-the-run 3.20% Jan-26 BTP Short Term (ISIN: IT0005584302) alongside E0.5-1.5bln of the 0.40% May-30 BTPei (ISIN: IT0005387052) and E0.75-1.25bln of the 2.40% May-39 BTPei (ISIN: IT0005547812).
- Germany tomorrow, will issue E4.5bln of the 2.90% Jun-26 Schatz (ISIN: DE000BU22056).
- Italy will return to the market on Thursday, to hold a 5/10-year BTP / CCTeu auction. Details will be announced on Monday. We expect to see a reopening of the 5-year 3.35% Jul-29 BTP (ISIN: IT0005584849) and potentially see a new 10-year BTP launched (if not a reopening of the 3.85% Jul-34 BTP (ISIN: IT0005584856)).
- NET NOMINAL FLOWS: The upcoming week sees redemptions of E20.4bln (most notably E14.7bln of a formerly 10-year Belgian OLO, E4.5bln of a formerly 10-year EFSF bond and E0.85bln of the formerly 7-year Cypriot bond). Coupon payments for the week are E5.9bln, of which E4.6bln are Belgian and E1.0bln are French. This leaves estimated net flows for the week at negative E3.4bln, versus positive E21.6bln last week.
