EU FINANCIALS: Fitch upgrades QBE Insurance

• On the commodity front, Gold has recovered from its recent lows and is trading higher today. The climb signals the end of the corrective phase between Apr 22 - May 15. Medium-term trend signals remain bullish - moving average studies are in a bull-mode position highlighting a dominant uptrend. A continuation would open $3435.6 next, the May 7 high. Key support and the bear trigger has been defined at $3121.0, the May 15 low.
• In the oil space, WTI futures have traded to a fresh short-term cycle high today before retreating. The recovery since Apr 9, still appears corrective. Key resistance to watch is $62.87, the 50-day EMA. It has been pierced, a clear break of it would highlight a stronger reversal. This would open $65.82, the Apr 4 high. For bears a reversal lower would refocus attention on $54.33, the Apr 9 low and bear trigger.

The Eurozone preliminary Q1 vacancy rate, released yesterday, pointed to a continued gradual softening of labour demand. The seasonally adjusted rate was 2.4%, down from 2.5% in Q4 for the lowest since Q2 2021. This is consistent with a downward trajectory of the EC’s expected employment indicator.

• The Eurozone unemployment rate remains at historic lows of 6.2% despite the softening in labour demand. The minor uptick in the EC’s labour hoarding indicator provides some context for this dynamic.
• Across industries, the industry and construction vacancy rate fell to 2.0% from 2.2% in Q4, while services eased to 2.6% from 2.7% prior.
• Across countries, the vacancy rate fell two tenths in Germany to 2.8%, and a tenth in France (2.4% vs 2.5% prior) and Italy (2.0% vs 2.1% prior).

• Treasuries trade bear steeper with fiscal policy in focus amidst ongoing deliberations around President Trump’s “big, beautiful bill”.
• Today's 20Y auction again offers a test of US duration demand.
• Bloomberg wrote overnight that Trump is losing patience with the SALT caucus demands to significantly boost the deduction cap (BBG story here).  
• However, since then, our political risk team notes that House Speaker Johnson had made progress with tentative agreements that could unlock support for a final vote as soon as today.
• Cash yields are 2.5-5.7bp higher on the day, with increases led by 30s. 5bp of the 5.7bp increase in 30Y yield is from real yields.
• 10Y and 30Y yields are back above their notable 4.50% and 5.00% levels, with 30s currently at 5.0269% with an eye on Monday’s 5.0353% that marked highs since Oct/Nov 2023 and before that 2007.
• 5s30s has lifted to 91.8bp but remains within the ytd high of 100bp on May 1.
• TYM5 trades at 109-26+ (-12) on solid volumes of 380k considering Bloomberg technical issues.
• The bear threat is still present, with last week’s low of 109-18+ (May 15 low) marking another step back towards a key support at 109-08 (Apr 11 low). Resistance is seen at 110-24+ (50-day EMA).
• Data: Weekly MBA applications (0700ET)
• Fedspeak: Barkin & Bowman in Fed Listens event (1215ET)
• Coupon issuance: US Tsy $16B 20Y Bond sale - 912810UL0 (1300ET)
• Bill issuance: US Tsy $60B 17W bill auction (1130ET)