OAT: French 10yr Yield edges to the July high

• RES 4: 112-15   61.8% retracement of the Apr 7 - 11 sell-off
• RES 3: 112-12+ High Jul 1 and a bull trigger
• RES 2: 111-13+/111-28 High Jul 10 / High Jul 3 
• RES 1: 111-01   20-day EMA  
• PRICE:‌‌ 110-12+@ 11:17 BST Jul 16
• SUP 1: 110-08+ Low Jul 14        
• SUP 2: 110-03   76.4% retracement of the May 22 - Jul 1 bull leg
• SUP 3: 109-28   Low Jun 6 and 11
• SUP 4: 109.25   Low May 27

Treasury futures traded lower yesterday. The contract has breached an important support at 110-17, 61.8% of the May 22 - Jul 1 bull leg. Note that price has also traded through a trendline support at 110-23+. The line is drawn from the May 22 low. This strengthens a bearish theme and a continuation would open 110-03, the 76.4% retracement. Resistance to watch is 111-13+, Jul 10 high. Initial resistance is at 111-01, the 20-day EMA.

OI data points to a modest bias towards net short setting on Tuesday, as contracts sold off in the wake of the CPI data.

• The biggest net positioning swing came via short setting in TY futures, although the presence of net long cover across most of the rest of the curve (modest net short setting in TU futures being the exception) made for little net change in exposure in curve-wide DV01 terms.