BUNDS: Eurex Rolls and US ISM Services are the focus Today.
- There's very little change for Bund and EGBs going into the European session, they are within Yesterday's range, with largely a two way price action in Govies since Yesterday.
- Bond Traders have taken the opportunity of the steadier markets, good liquidity, and ahead of the US ISM Services (today), ECB (Tomorrow), NFP (Friday) to roll their Eurex Positions into the September Contract.
- The June is still front Month, but expect for the September expiry to be front by the end of day, as such the Bund levels below are still in the June expiry.
- The range bound price action meant that the initial resistance area at 131.72 held Yesterday, and the initial support is still eyed at 130.94.
- Today's Services PMIs will be final readings for France, Germany, EU, UK and US. The US ADP hasn't been a real Market mover for quite some time, US ISM Services is at the forefront Today.
- SUPPLY: UK £4.75bn 2028 (equates to 13.7k Gilt) should have a limited impact.
- SYNDICATION: Italy 5yr Benchmark and €5bn WNG 2037 Green Tap.
- SPEAKERS: Fed Bostic, Cook
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GOLD TECHS: Testing Support
- RES 4: $3600.0 - Round number resistance
- RES 3: $3578.0 - 2.000 proj of the Dec 19 - Feb 24 - Feb 28 swing
- RES 2: $3547.9 - 1.764 proj of the Feb 28 - Apr 3 - Apr 7 price swing
- RES 1: $3386.6/3500.1 - High Apr 23 / 22 and the bull trigger
- PRICE: $3259.6 @ 07:19 BST May 5
- SUP 1: $3202.0 - Low May 1
- SUP 2: $3167.8 - High Apr 3 and a recent breakout level
- SUP 3: $3164.3 - 61.8% retracement Apr 7 - Apr 22 upleg
- SUP 4: $3115.1 - 50-day EMA
Gold is trading closer to its recent lows and a corrective cycle remains in play for now. The yellow metal has breached the 20-day EMA. A continuation lower would highlight a deeper retracement and open the 50-day EMA, at 3115.11 - a key support. The primary trend direction remains up. A resumption of gains would refocus attention on $3500.0, the 50-day EMA. Clearance of this level resumes the uptrend.
CROSS ASSET: Bunds, USD softer to start Fed week, trade deals could be by Friday
- It's a UK market holiday today, however European and US markets are open as usual throughout. Newsflow over the weekend touches on familiar themes - with US trade deals potentially announced this week (deals with Japan and India are among the most advanced) and the President again voicing dissatisfaction in Fed's Powell ahead of this week's rate decision.
- The greenback is weaker against all others headed into the open, however pullbacks are shallow and markets still hold a decent part of last Friday's rally. Some nerves of the potential use of Japan's UST holdings in trade negotiations were allayed overnight, as the PM stated they would note use holdings as a bargaining chip.
- Meanwhile, Bunds are weaker in early Europe and have shown through last Friday's lows. Despite the latest move down, a bull cycle is in play, however weakness through 128.60 would change that outlook.
- US ISM Services data is the calendar highlight Monday. The Fed remain inside their pre-decision media blackout period.
BTP TECHS: (M5) Bullish Theme
- RES 4: 121.93 76.4% of the Dec 5 ‘24 - Mar 14 bear leg (cont)
- RES 3: 121.43 1.618 proj of the Mar 14 - Apr 4 - 9 price swing
- RES 2: 121.00 High Feb 7 (cont) and a key resistance
- RES 1: 120.65 1.382 proj of the Mar 14 - Apr 4 - 9 price swing
- PRICE: 119.92 @ Close May 2
- SUP 1: 119.60/119.25 Low Apr 23 / 20-day EMA
- SUP 2: 117.28 Low Apr 10
- SUP 3: 116.06 Low Apr 9
- SUP 4: 115.75 Low Apr 14 and a bear trigger
BTP futures are in consolidation mode. A bull cycle remains intact and the contract is holding on to the bulk of its recent gains. The recent break of a key resistance at 120.39, the Feb 28 high, reinforces a bullish theme. Sights are on 120.65 next, a Fibonacci projection. Firm support to watch lies at 119.25, the 20-day EMA. The contract is overbought, a pullback would unwind this trend condition.
