FOREX: GBP Consolidating Most Recent Weakness, UK Labour Market Data Thursday
Jul-16 11:39
- This morning’s higher-than-expected UK CPI readings have been shrugged off by the pound, as markets await labour market data on Thursday and assess the ongoing fiscal concerns for the UK economy. GBPUSD’s post data advance was contained to a 20 pip rally to 1.3417 before then oscillating either side of 1.3400.
- Technical considerations are likely helping cable consolidate its most recent weakness. Following a clean break of the 50-day EMA, spot subsequently breached important trendline support (drawn from the Jan 13 low) below 1.3430 yesterday, which has helped cap the topside today. Developments strengthen a bearish threat, and the next immediate focus is on 1.3371, the Jun 23 low and a key short-term support. Below here, attention will be on 1.3335 and 1.3245, the May 20 & 19 lows respectively.
- In similar vein, a bullish condition in EURGBP remains intact and fresh 3-month highs this week maintain the price sequence of higher highs and higher lows, highlighting a dominant uptrend. Scope is seen for a climb towards key resistance at 0.8738, the Apr 11 high.
- Tomorrow’s labour market data takes on increased significance following BoE's Bailey flagging the MPC's potential responsiveness to further jobs declines in his interview with The Times this weekend. We previewed the data fully here: https://mni.marketnews.com/4eQADLZ
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PIPELINE: Corporate Bond Roundup: EIB, IBK, Hungary on TAP
Jun-16 11:28
- Date $MM Issuer (Priced *, Launch #)
- 06/16 $Benchmark EIB 7Y SOFR+53a
- 06/16 $Benchmark IBK 3Y SOFR+58a, 5Y +45a
- 06/16 $Benchmark Hungary +5Y, +10Y, +30Y
- 06/13 No new issuance Friday, $22.8B total on week
OUTLOOK: Price Signal Summary - Bund Support Remains Intact
Jun-16 11:14
- In the FI space, Bund futures have traded lower today, extending the reversal from Friday’s session high. For now, the move down is considered corrective and key short-term support to watch lies at 130.12, the Jun 5 low. A break of this level would highlight a stronger reversal and undermine the bullish theme. Key short-term resistance and the bull trigger, has been defined at 131.95, the Jun 13 high.
- A bullish condition in Gilt futures remains intact and Friday’s steep sell-off from the session high is for now, considered corrective. The move higher last week marks an extension of the recent breach of resistance at 91.87, the May 20 high. This signals scope for a test of 93.73, a 1.764 projection of the May 22 - 27 - 29 price swing. Note the uptrend is in overbought territory, a deeper pullback would unwind this position. First firm support lies at 92.04, the 20-day EMA.
STIR FUTURES: UPDATE on Large Dec'25 & Mar'26 SOFR Volume
Jun-16 11:10
- Reportedly over 72,500 SFRH6/SFRM6 spds sold at -0.195 - hitting the bid, remains well offered.
