OPTIONS: Expiries for Jul31 NY cut 1000ET (Source DTCC)
- EUR/USD: $1.1475-90(E1.3bln), $1.1490(E986mln), $1.1600-10(E2.6bln), $1.1650-70(E2.0bln), $1.1745-50(E1.1bln), $1.1800(E2.0bln)
- USD/JPY: Y146.00-20($1.5bln), Y147.40-50($728mln), Y148.00($522mln)
- AUD/USD: $0.6465(A$1.0bln), $0.6600(A$1.4bln)
- NZD/USD: $0.5965(N$505mln)
- USD/CAD: C$1.3670-75($1.0bln), C$1.3740($602mln)
- USD/CNY: Cny7.0700($1.4bln), Cny7.1500($897mln)
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EUROPEAN INFLATION: German Services Inflation Trend Eases But Still >3.0%
The Bundesbank’s estimate of seasonally-adjusted German CPI suggests sequential services inflation accelerated in June. A trend 3m/3m rate meanwhile eased to its lowest in the year to date and whilst it's still relatively elevated at 3.2% annualised it is at least partly offset by subdued goods inflation.
- Overall core inflation decreased to 0.08% M/M SA (0.26% in May, 1.0% annualised) on a seasonally adjusted basis per Buba calculations, with services inflation at 0.26% M/M (vs 0.09% in May, 3.1% annualised).
- Manufactured goods ex-energy meanwhile moved into negative territory in June, at -0.17% M/M vs 0.25% May, its lowest rate since February.
- The services 3m/3m rate meanwhile eased to 3.2% annualised in June from 3.6% in May for its lowest since Dec 2024 and before that Feb 2024. This run rate is back a little below the Y/Y of 3.3% although for context it ended 2019 at 1.8% Y/Y.
- Going against this, manufacturing goods ex energy stood at a 3m/3m 1.1% annualised for below the 1.5% Y/Y. This is closer to the 1.4% Y/Y in Dec 2019 to continue that relative comparison.
US 10YR FUTURE TECHS: (U5) Holding On To Its Recent Gains
- RES 4: 114-14 High Apr 7 and key resistance
- RES 3: 113-07 76.4% retracement of the Apr 7 - 11 bear leg
- RES 2: 112-23 High May 1 and key resistance
- RES 1: 112-04+ High May 2
- PRICE: 111-29+ @ 17:13 BST Jun 30
- SUP 1: 111-11+/110-27 Low Jun 25 / 50-day EMA
- SUP 2: 110-10+/109-28 Low Jun 16 / Low Jun 6 / 11
- SUP 3: 109-12+ Low May 22 and the bear trigger
- SUP 4: 109-09+ Low Apr 11 and key support
Treasury futures traded higher last week and the contract is holding on to its gains. Resistance at 111-14+, the Jun 5 high and 61.8% of the May 1 - 22 downleg, has been cleared. The break strengthens a bullish cycle. Note too that last Thursday’s gains delivered a print above 111-30, 76.4% of the May 1-22 downleg. A clear break of this level would strengthen current conditions. Initial pivot support to watch lies at 110-27, the 50-day EMA.
SOFR OPTIONS: Large Mar'26 SOFR Straddle vs. Calls
- +20,000 SFRH6 96.12 straddles vs. 97.00 call, 28.5-29.0 vs. 97.00/0.20%
- +5,000 SFRN5 95.75/95.81 put spds, 0.25
