BUNDS: Focus is on Supply Today
- It was just a 7 ticks range for Bund Overnight and was trading flat going into the Cash Open.
- While US Treasuries are still showing September as the most active contract, this will change Today, and as such we'll start quoting the December Contract. Expect Dec Gilt to be front when it opens.
- Back to the German Bund, the range has slightly increases to 11 ticks post Cash Open, and the GFK Data miss had no impact on the contract.
- Overall the initial resistance and support are still untested.
- These are at 129.62 (resistance), and 128.59 (support, and 2.80% level).
- There are no Tier 1 Data for Today's session, Friday will be the main day on the Data front. Focus is on Supply and the completion of the US and UK Bonds roll into December.
- SUPPLY: UK £5bn 3yr (equates to 13.8k Gilt) should have limited impact, German €4bn 7yr (equates to 25.6k Bund, or 51.2k Bobl) should weigh into the bidding deadline. US Sells $70bn of 5yr Notes, and $28bn of 2yr FRN reopening.
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BRENT TECHS: (U5) Bear Threat Remains Present
- RES 4: $85.00 - Round number resistance
- RES 3: $81.99 - 2.764 proj of the Apr 9 - 23 - May 5 price swing
- RES 2: $80.72 - 2.618 proj of the Apr 9 - 23 - May 5 price swing
- RES 1: $72.66/79.40 - 50.0% of the Jun 23-30 range / High Jun 23
- PRICE: $68.97 @ 07:12 BST Jul 28
- SUP 1: $65.92 - Low Jun 30
- SUP 2: $61.39 - Low May 30
- SUP 3: $58.00 - Low May 5
- SUP 4: $57.70 - Low Apr 9 and a key support
The trend set-up in Brent futures is unchanged and a bearish theme remains present. The sell-off on Jun 23 continues to signal scope for further weakness. The contract has pierced support at the 50-day EMA and note too that $66.17, 61.8% of the May 5 - Jun 23 bull leg, has also been pierced. A resumption of the bear leg would expose $61.39, May 30 low. Initial resistance to watch is $72.66, a Fibonacci point.
BTP TECHS: (U5) Corrective Cycle
- RES 4: 122.35 2.500 proj of the May 14 - 20 - 21 price swing
- RES 3: 122.00 Round number resistance
- RES 2: 121.46/121.73 High Jul 22 / High Jun 13 and the bull trigger
- RES 1: 120.65 20-day EMA
- PRICE: 120.21@ Close Jul 25
- SUP 1: 119.59 Low Jul 25
- SUP 2: 119.48 Low May 26
- SUP 3: 118.87 Low May 21
- SUP 4: 118.51 Low May 14 and key support
The primary trend condition in BTP futures remains bullish, however, a corrective cycle is in play. Friday’s volatile session resulted in a break of support at 119.84, the Jul 14 low. A continuation of the bear cycle would open 118.87, the May 21 low. On the upside, initial firm resistance to watch is 120.65, the 20-day EMA. A break of this EMA would expose key resistance and the bull trigger at 121.73, the Jun 13 high.
BUNDS: Inflation, Growth, Fed and Month End this Week
- The German Bund is unaffected from the reports that the US and EU have struck a 15% Tariff deal, but the immediate focus for Global investors will be on the Equity move, a new record high for the US Emini, while the Estoxx Futures (VGU5) could now target the July high of 5488.00.
- For the German Bund, it seems that the 2.75% area in the 10yr Yield provided some support on Friday, although it did print as high as 2.769%.
- Immediate upside target is at 129.50, Today's opening Gap, ahead of 130.00, the initial resistance.
- Support comes at Friday's low of 128.84.
- This Week sees some European CPIs and Growth Data, while the FOMC will take centre stage. The Fed is expected to be unchanged at 4.50%.
- MONTH END: is Small for the US, Decent for the EU, and HUGE for the UK at +0.22yr vs a +0.23yr July Historic high.
