FOREX: EURJPY Extends Rally, Reaches Near 11-Month High
Jun-20 16:23
- The week has been characterised by a fragile risk backdrop associated with the middle east conflict, furtively boosting the greenback’s appeal. The USD Index has showed above the downtrendline that has helped define the dollar weakness across Trump's term so far, with the geopolitical uncertainty prompting a covering phase that triggered a close above resistance yesterday. This level remains relevant and a corrective phase higher could build a base on a convincing break.
- There has been mixed price action across G10 on Friday, with the most notable laggards, the AUD and NZD, while the Japanese yen has also been under pressure. As such, USDJPY has risen as high as 145.96, narrowing the gap to an important resistance at 146.28, the May 29 high.
- However, EURUSD is higher Friday and sits just 25 pips lower on the week, a very positive sign for market participants looking for further single currency appreciation in H2. Moving average studies continue to display a dominant uptrend, with corrective dips remaining well supported. Scope is seen for a climb towards 1.1696, a Fibonacci projection.
- The Euro’s resilience has seen EURJPY (+0.63%) extend its recent rally, and notably climbing above 168.00 to trade at near 11-month highs for the cross, and signalling scope for a move towards 170.00.
- USDCAD stands 0.22% higher on the day following a weaker-than-expected set of Canadian April retail sales and a notably weak flash print for May.
- Global flash PMI data highlights Monday’s calendar, with French and German readings kicking things off.
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US TSY FUTURES: June'25-September'25 Roll Update
May-21 16:21
Surging Tsy quarterly futures roll volumes from June'25 to September'25 outlined below. The 5Y continues to lead volumes with nearly 1M so far, the roll approximately 20% complete ahead the "First Notice" date on May 30. Current roll details:
- TUM5/TUU5 appr 267,100 from -9.12 to -8.5, -8.62 last, appr 10% complete
- FVM5/FVU5 appr 997,400 from -3.75 to -3.0, -3.25 last, appr 20% complete
- TYM5/TYU5 appr 530,900 from -1.5 to -0.5, -0.75 last, appr 16% complete
- UXYM5/UXYU5 appr 145,300 from 3.75 to 4.0, 3.75 last, appr 7% complete
- USM5/USU5 appr 183,100 from 10.0 to 12.75, 11.5 last, appr 11% complete
- WNM5/WNU5 appr 98,500 from 6.0 to 6.75, 6.25 last, appr 8% complete
- Reminder, June futures won't expire until next month: 10s, 30s and Ultras on June 18, 2s and 5s on June 30. June Tsy options, however, expire May 23.
US TSYS/SUPPLY: Preview 20Y Auction
May-21 16:02
Tsy futures remain weaker ahead of the $16B 20Y bond auction (912810UL0) at 1300ET, WI is currently at 5.035%, 22.5bp cheap to last month's stop. Today's results will be available shortly after the competitive auctions closes at 1300ET.
- April auction recap: the $13B 20Y Bond auction re-open (912810UJ5) traded 0.4bp through, with a high yield of 4.810% vs a 4.814% When-Issued yield at cutoff. This was a smaller trade-through than prior (1.4bp in March), but was the 3rd in the last 4 auctions.
- As with the trade-through, the main peripheral statistics were weaker than March's but overall largely in line with the past 5-auction average: bid-cover of 2.63x (5-auction average 2.56x) and primary dealer takedown 17.0% (15.5% avg).
- Indirects took a relatively high 70.7% (66.6% avg), the highest in 8 auctions and a potential signal of foreign demand for the Bond - with directs taking a lesser 12.3% (18.0% avg).
PIPELINE: Corporate Bond Update: $2B Turkiye 7Y Launched
May-21 15:59
- Date $MM Issuer (Priced *, Launch #)
- 05/20 $4B *ADB 5Y SOFR+42
- 05/21 $2B #Turkiye 7Y 7.45%
- 05/21 $1.5B OKB 3Y +34
- 05/21 $1.25B *Kommunalbanken +5Y SOFR+49
- 05/21 $1B Finnvera WNG 5Y SOFR+53a
- 05/21 $Benchmark Citibank 2Y +58, 2Y SOFR, 5Y +78, 5Y SOFR
- 05/21 $Benchmark Northwestern Mutual Life 30Y +135a
- 05/21 $Benchmark BPCE 6NC5 +150a, 11NC10 +175a
