EURIBOR OPTIONS: Mid-Curve Call Condor

• EUR vols gapped higher at the open Monday as the very front-end of the curve now captures the first round of the French legislative elections - 1wk vols were marked higher to 7.7 points, a ~2 point premium over background average vol this year.
• Options struck since Macron's election call have played the downside theme, with strong interest evident in put strikes at 1.0700 and below. Decent demand for exposure at 1.05 and below has built well across the past few weeks, with over €23bln in put notional traded between 1.05 - 1.03 strikes since June 9th (see full chart below).
• EUR/USD remains in a M/T downtrend headed into the results, and a stronger-than-expected showing for the far-left, or far-right will build expectations for protracted political stalemate across the rest of Macron's Presidential term. Such an outcome would add pressure to next support at 1.0668 in EUR/USD, ahead of 1.0601 - the bear trigger.
• Voting booths open Sunday, polls close at 2000CET, and exit polls will be published immediately afterwards. Results to trickle in and then accelerate through the night, almost all seats should be known by the morning of 1 July.

EUR/USD options traded since Macron's election call show clear bias for downside:

WTI futures traded higher last week, extending the current bull phase. The climb has resulted in a break of $80.11, the May 29 high and a key resistance. The clear breach of this hurdle cancels a recent bearish theme and paves the way for $82.24, a Fibonacci retracement point. Initial firm support to watch is $78.33, the 20-day EMA. A break would be seen as an early potential reversal signal. Gold continues to trade below resistance - for now. A sharp sell-off on Jun 7 reinforced a short-term bearish theme. The yellow metal has pierced the 50-day EMA, at 2317.7. A clear break would confirm a resumption of the reversal from May 20 and open $2277.4, the May 3 low. Clearance of this price point would also strengthen a bearish theme. Initial firm resistance is $2387.8, the Jun 7 high.

• WTI Crude up $0.21 or +0.26% at $80.95
• Natural Gas down $0.01 or -0.22% at $2.7
• Gold spot up $7.53 or +0.32% at $2329.57
• Copper up $0.45 or +0.1% at $443.5
• Silver up $0.15 or +0.51% at $29.7028
• Platinum up $11.14 or +1.12% at $1006.02

The trend condition in Eurostoxx 50 futures remains bullish. A corrective cycle has resulted in a pullback from the May high. Recent weakness has seen price breach 4988.00, Jun 11 low, highlighting potential for a deeper retracement and has exposed 4846.00, Apr 19 low and a key support. The recovery from the Jun 14 low is an early bullish signal. Resistance to watch is at 5092.00, Jun 12 high. A break would expose key resistance at 5151.00. The uptrend in S&P E-Minis remains intact and the contract continues to trade close 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.

• Japan's NIKKEI closed higher by 208.18 pts or +0.54% at 38804.65 and the TOPIX ended 15.5 pts higher or +0.57% at 2740.19.
• Elsewhere, in China the SHANGHAI closed lower by 35.039 pts or -1.17% at 2963.099 and the HANG SENG ended 0.81 pts lower or 0% at 18027.71.
• Across Europe, Germany's DAX trades higher by 100.44 pts or +0.55% at 18262.77, FTSE 100 higher by 36.18 pts or +0.44% at 8273.76, CAC 40 up 44.12 pts or +0.58% at 7672.69 and Euro Stoxx 50 up 31.83 pts or +0.65% at 4939.13.
• Dow Jones mini up 73 pts or +0.18% at 39656, S&P 500 mini up 10 pts or +0.18% at 5544, NASDAQ mini up 31.75 pts or +0.16% at 20015.25.