US 10YR FUTURE TECHS: (H6) Bear Threat
Dec-17 11:02
- RES 4: 113-09 76.4% retracement of the Nov 25 - Dec 10 bear leg
- RES 3: 113-00+ 61.8% retracement of the Nov 25 - Dec 10 bear leg
- RES 2: 112-27+ High Dec 5
- RES 1: 112-22+/23 High Dec 16 and 50-day EMA / High Dec 11
- PRICE: 112-11+ @ 10:52 GMT Dec 17
- SUP 1: 111-29 Low Dec 10 and the bear trigger
- SUP 2: 111-19 1.236 proj of the Oct 17 - Nov 5 - 25 price swing
- SUP 3: 111-11 1.382 proj of the Oct 17 - Nov 5 - 25 price swing
- SUP 4: 111-00 Round number support
The short-term condition in Treasuries is bearish and near-term resistance points remain. A continuation lower would refocus attention on key support at 111-29, the Dec 10 low. Clearance of this level would confirm a resumption of the bear leg and open 111-19, a Fibonacci projection. On the upside, a clear breach of 112-23, the Dec 12 high would instead strengthen a short-term bull cycle.
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BUNDS: Multi-Week Range Intact, J.P.Morgan Recommend Tactical Long
Nov-17 10:53
Bund yields have registered the highest level of the month over the past couple of sessions (2.720%), but bears have failed to force a retest of the 2.75% area that provided demand in late September/early October.
- Against this backdrop, J.P.Morgan recommended a tactical long in Bunds late on Friday,
- They noted that last week’s sell off “pushed 10-Year German yields closer to the upper-end of our expected 2.55-2.75% range”
- They maintain a “strategic bullish duration bias driven on the expectation of limited term premia in the German curve, positive carry, and improving long-term demand for EGBs”.
- Ultimately, they see “no clear domestic catalyst for German yields to break above recent ranges”. They also note that “the correlation of German yields to U.S. yield has weakened sharply over the past few weeks, which seems reasonable in our view and we expect this dynamic to persist going forward, thus limiting any sell-off contagion from other DM markets”.
OUTLOOK: Price Signal Summary - Corrective Cycle In EUROSTOXX50 Futures
Nov-17 10:51
- In the equity space, the trend condition in S&P E-Minis remains bullish and the latest selloff appears corrective - for now. Support at the 50-day EMA, at 6730.32, has been pierced, however, price is once again trading above the average. The next key support to watch is 6655.50, the Nov 7 low. Friday’s price pattern is a doji candle - a reversal signal. Initial firm resistance to watch is 6900.50, the Nov 12 high. A breach of this level would be bullish.
- A medium-term bull trend in EUROSTOXX 50 futures remains intact and last week’s gains reinforce bullish conditions. However, the latest pullback suggests the start of a corrective phase. Price has traded through the 20-day EMA. Attention is on support at the 50-day EMA, at 5604.85, and 5599.00, the base of a bull channel drawn from the Aug 1 low. These two price points represent key support. A break would highlight a stronger reversal.
EU-BOND SYNDICATION: 2.50% Oct-30 tap mandate
Nov-17 10:47
- "The EU has mandated Goldman Sachs Bank Europe SE, HSBC, J.P. Morgan, Natixis and UBS as Joint Lead Managers for its upcoming Fixed Rate RegS Bearer increase of the EU 2.500% benchmark due 14 October 2030 (EU000A4EG021). No further group. The transaction will be launched tomorrow, subject to market conditions."
- Probably a smaller syndication than some had expected. Just a single line and only 5-year maturity (but we are coming to the end of the year).
