EUR: FX Exchange traded Option

EURIBOR FIX - EMMI/Bloomberg:

• 1W 3.60900 -4
• 1M 3.60600 -2.9
• 3M 3.54200 0
• 6M 3.39800 -4.3
• 12M 3.14800 -3.2

• RES 4: 1.1139 High Dec 29 2023 and a key resistance
• RES 3: 1.1084 High Dec 29 2023
• RES 2: 1.1046 High Jan 2
• RES 1: 1.1023 Intraday high
• PRICE: 1.1022 @ 10:14 BST Aug 14
• SUP 1: 1.0901 20-day EMA
• SUP 2: 1.0850 50-day EMA
• SUP 3: 1.0778 Low Aug 1 and a key support
• SUP 4: 1.0736 Low Jul 3

EURUSD traded higher yesterday and the pair is climbing again today as it extends this week’s bull phase. Resistance at 1.1008, the Aug 5 high, has been cleared and this confirms a resumption of the uptrend. Sights are on 1.1046, the Jan 2 high, ahead of 1.1084, the Dec 29 ‘23 high. Note moving average studies remain in a bull-mode set-up, highlighting a rising trend. Initial support to watch lies at 1.0901, the 20-day EMA.

EGBs have more than reversed the early London rally that followed softer-than-expected UK CPI data, although desks highlight subdued summer volumes.

• Bund futures respected initial resistance (135.18) peaking at 135.16, last -28 at 134.78.
• The presence of French (mixed cover ratios, low prices cleared above prevailing mids) & impending German long end supply probably added some weight after that resistance level held.
• Eurozone GDP & industrial production data had no impact.
• German yields are ~2bp higher across the curve.
• Major EGB spreads to Bunds are within 1bp of yesterday’s closing levels.
• An uptick in the Euro Stoxx will be providing some background spread tightening impetus.
• 10-Year BTP/Bunds has traded either side of 140bp in recent sessions after peaking at ~154bp during last Monday’s risk-off trade.
• EUR 3M10Y vol. has stabilised around the middle of its July 23-Aug 5 range.
• U.S. CPI data provides the macro data release of note today, coming in the wake of yesterday’s softer-than-expected U.S. PPI data.