POWER: German, French Spot Power Indices Decline

• Treasuries trade modestly twist flatter on the day although broadly speaking consolidate yesterday’s sell-off on the June CPI report with its signs of increased tariff passthrough.
• Treasuries outperform Gilts across the curve owing to stronger than expected UK CPI, whilst they underperform EGBs at the front end but track in line further out the curve.
• Cash yields are 0.7bp higher (2s) to 1.8bp lower (30s).
• The 10Y yield, currently at 4.473%, saw an overnight high of 4.493%, having last cleared 4.50% on Jun 11.
• TYU5 trades at 110-11+ (+ 02+) on solid cumulative volumes of 375k, albeit keeping to narrowing ranges of 110-08+ to 110-13+.
• It consolidates yesterday’s push lower to that 110-08+, seen multiple times since then, in a move that breached an important support at 110-17 (61.8% of May 22 – Jul 1 bull leg). It has also traded through trendline support at 110-23+, strengthening a bearish theme and opening 110-03 (76.4% retrace of the same bull leg).
• Data: MBA mortgage applications (0700ET), PPI Jun (0830ET), NY Fed services Jul (0830ET), IP/Cap util Jun (0915ET)
• Fedspeak: Barkin repeats speech (0830ET, text + Q&A), Hammack on community development (0915ET, text only), Gov. Barr on financial regulation (1000ET, text + Q&A), Beige Book (1400ET), Bostic on fox business network (1530ET), NY Fed's Williams on economic outlook and policy (1830ET, text + Q&A).
• Bill issuance: US Tsy to sell $65bn 17-W bills (1130ET)

Awaiting results from Bank of America in around 10 minutes times - continuing the theme of big bank earnings that should dominate this week. Highlights today include:

• 1145BST/0645ET: Bank of America
• 1230BST/0730ET: Morgan Stanley, Goldman Sachs
• Pre-Market: Prologis, Progressive Corp
• After-Market: United Airlines

Our full schedule including timings, EPS and revenue estimates here: https://media.marketnews.com/MNIUSEARNINGS_110725_c282a28044.pdf

• In FX, a corrective cycle in EURUSD remains in play and the pair traded lower Tuesday. Support at the 20-day EMA, at 1.1655, has been cleared. This shifts the focus to the 50-day EMA, at 1.1505. A clear break of the average is required to highlight a stronger reversal. For now, the move down appears corrective and trend signals continue to highlight a dominant uptrend. A resumption of gains would open 1.1829, the Jul 1 high and a bull trigger.
• A short-term bear cycle in GBPUSD remains in place and this week’s move down reinforces current bearish conditions. The pair has breached both 20- and 50-day EMAs. Yesterday’s move down resulted in a break of trendline support at 1.3440. The trendline is drawn from the Jan 13 low and the breach strengthens a bearish threat, exposing 1.3371 initially, the Jun 23 low. Initial firm resistance to watch is 1.3555, the 20-day EMA.
• A short-term bull cycle in USDJPY remains firmly in place and this week’s gains reinforce current conditions. The latest rally has resulted in a breach of resistance at 148.03, the Jun 23 high, and a move through key resistance at 148.65, the May 12 high. Clearance of both levels strengthens the bull theme and opens 149.38, 50.0% of the Jan 10 - Apr 22 bear leg. On the downside, support to watch is 145.44, the 50-day EMA.