FOREX: Firmer Trump Stance on EU Tariffs Weighs on Euro, EURCAD Sharply Lower
Feb-26 17:39
- The firmer stance on EU tariffs compared to the more appeasing extension for Canada and Mexico weighs on the single currency in recent trade, with EURUSD slipping from key resistance around 1.0530 to 1.0495 at typing.
- EURCAD sharply lower on the contradictory sentiment, trading the entire day's range in quick fashion, from 1.5095 to 1.5026 lows.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
BONDS: EGBs-GILTS CASH CLOSE: Yields Pull Back On Tech-Led Equity Weakness
Jan-27 17:36
European yields fell Monday though finished off session lows, mirroring intraday movements in equities.
- U.S. equity weakness (less pronounced in Europe), triggered by Chinese tech firm DeepSeek's AI advancements weighing on U.S. tech megacaps, saw bonds supported for most of the session.
- However, yields finished up from intraday lows as stocks recovered. 10Y Gilts closed 3bp up from the session lows, with Bunds bouncing 4bp.
- Even so, German curve bull steepened, with the UK's more mixed with belly outperformance. Periphery/semi-core EGB spreads to Bunds widened slightly; RAGBs slightly underperformed peers following an Austrian dual-tranche syndication mandate.
- In data, January German IFO came in a little stronger than expected, but Expectations unexpectedly fell. Market reaction was limited.
- Focus for the week remains on Thursday's ECB decision, as well as multiple data points including Eurozone country-level preliminary inflation data for January.
Closing Yields / 10-Yr EGB Spreads To Germany
- Germany: The 2-Yr yield is down 4.1bps at 2.249%, 5-Yr is down 4bps at 2.341%, 10-Yr is down 3.8bps at 2.531%, and 30-Yr is down 3.4bps at 2.751%.
- UK: The 2-Yr yield is down 3.7bps at 4.288%, 5-Yr is down 5.4bps at 4.283%, 10-Yr is down 4.4bps at 4.585%, and 30-Yr is down 4.7bps at 5.143%.
- Italian BTP spread up 1.5bps at 110.2bps / French OAT up 0.2bps at 74bps
US TSYS/SUPPLY: Preview 5Y Auction
Jan-27 17:08
- Tsy futures remain well bid but off highs ahead of the $70B 5Y note auction (91282CMG3) at 1300ET, WI is currently running at 4.347%, 13.1bp rich to last month's stop.
- December 5Y auction recap: Tsy futures pared losses (TYH5 trades 108-13 last, -2) after $70B 5Y note auction (91282CMD0) stopped 0.2bp through (second consecutive stop since June): drawing 4.478% high yield vs. 4.480% WI; 2.40x bid-to-cover vs. 2.43x for the prior auction.
- Peripheral stats showed indirect take-up climbed to 67.27% vs. 64.12% prior, directs at 20.26% vs. 24.58% prior (highest since Jul 2014), primary dealer take-up 12.47% vs. 11.30% prior.
US 10YR FUTURE TECHS: (H5) Meets The 50-Day EMA
Jan-27 17:03
- RES 4: 110-25 High Dec 12
- RES 3: 110-19 76.4% retracement of the Dec 6 - Jan 13 bear leg.
- RES 2: 109-31 High Dec 18
- RES 1: 109-12+ 50-day EMA
- PRICE: 109-02+ @ 17:01 GMT Jan 27
- SUP 1: 108-00/107-06 Low Jan 16 / 13 and the bear trigger
- SUP 2: 107-04 Low Apr 25 ‘24 and a key support
- SUP 3: 107-00 Round number support
- SUP 4: 106-11 2.00 proj of the Oct 1 - 14 - 16 price swing
The medium-term trend condition in Treasury futures is down, however a bullish short-term cycle highlights an ongoing corrective phase and the contract is trading higher today. Attention is on 109-12+, the 50-day EMA - a level tested on Monday. A clear break of this EMA is required to strengthen a bullish theme. This would open 109-31, the Dec 18 high. The bear trigger is unchanged at 107-06, the Jan 13 low. Initial support has been defined at 108-00, the Jan 16 low.
