BUNDS: Heavy Italian supply will be the early focus
- The German Bund remains elevated after acting as a safer haven against the French OAT this Week, the overnight range was just 12 ticks wide, now 15, but Desks will be watching the next resistance seen at 130.00, did print a 130.06 high on the 14th August.
- Small support moves up to 129.50, followed by 129.16 initially.
- The Risk off Tone seemed to have also been supportive of Bund, and the early focus will be on European semi conductors on the cash Open.
- Yesterday NVIDIA posted robust growth within some of the expectations but was cautious about the Outlook given the Chinese Market uncertainty.
- Nonetheless, JPM have raised their target to $215 vs $170, MS to $210 vs $206, and Citi to $210 vs $190.
- There are no Tier Data out of Europe, the EU Consumer Confidence isn't a market mover, focus this afternoon will be on the US 2nd reading GDP/Core PCE QoQ, and the usual Weekly IJC is also due, but hasn't been a Market of late.
- Friday is the big Day on the Data front.
- ECB will Publish its Account (minutes).
- SUPPLY: Italy 2030, 2035s (equates combined 44.7k BTP) will weigh, the 2034 floating bond won't impact BTP. {us} US Sells $44bn of 7yr Notes.
- SPEAKERS: ECB Rehn, Fed Waller.
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NORWAY: Retail Sales Momentum Has Levelled Off But Remains Positive
Momentum in Norwegian retail sales has levelled off over the last few months, but remains positive. As such, retail sales should contribute positively to Q2 household consumption, due towards the end of August.
- Sales excluding motor vehicles were flat M/M (vs 0.1% prior), but 3m/3m growth was still 1.1% (vs 1.5% in May and 1.7% in March).
- Excluding both motor vehicles and fuel, sales rose 0.2% in June (vs -0.3% prior), with 3m/3m growth at 1.4% (after four consecutive months at 1.5%).
- Q2 and Q3 retail trade output expectations were both 0.5% Q/Q in the June Norges Bank Regional Network Survey.
- Next week’s inflation report will be more important for the Norges Bank outlook. We think an in line (with the June MPR) print should be consistent with a quarterly pace of cuts in September and December.
WTI TECHS: (U5) Support Remains Exposed
- RES 4: $81.12 - 3.000 proj of the Apr 9 - 23 - May 5 price swing
- RES 3: $80.00 - Psychological round number
- RES 2: $77.75 - 2.618 proj of the Apr 9 - 23 - May 5 price swing
- RES 1: $69.41/75.98 - 50.0% of the Jun 23-24 range / High Jun 23
- PRICE: $66.70 @ 07:11 BST Jul 29
- SUP 1: $64.85/62.84 - 50-day EMA / Low Jun 24
- SUP 2: $58.17 - Low May 30
- SUP 3: $54.66 - Low May 5
- SUP 4: $54.01 - Low Apr 9 and a key support
A bearish theme in WTI futures remains intact and the shallow recovery since Jun 24 still appears corrective. The sharp reversal from the Jun 23 high continues to highlight scope for an extension lower. Support to watch is the 50-day EMA, at $64.85. The average has been pierced, a clear break of it would expose $58.17, the May 30 low. On the upside, initial resistance to watch is $69.41, the 50.0% retracement of the Jun 23 - 24 high-low range.
GOLD TECHS: Corrective Pullback Extends
- RES 4: $3547.9 - 1.764 proj of the Feb 28 - Apr 3 - Apr 7 price swing
- RES 3: $3500.1 - High Apr 22 and bull trigger
- RES 2: $3451.3 - High Jun 16
- RES 1: $3373.6/3439.0 - High Jul 25 / 23
- PRICE: 3319.6 @ 07:19 BST Jul 29
- SUP 1: $3301.9 - Low Jul 27
- SUP 2: $3282.8/3248.7 - Low Jul 9 / Low Jun 30 and the bear trigger
- SUP 3: $3204.7 - Low May 20
- SUP 4: $3121.0 - Low May 15 and key support
Gold has pulled back from its Jul 23 high. Short-term weakness is considered corrective - for now - and a bull cycle that started Jun 30 remains intact. However, the yellow metal has traded through support at $3322.9, the 50-day EMA. A clear break of this level would signal scope for a deeper retracement and expose the next key support at $3282.8, the Jul 9 low. Key short-term resistance is $3439.0, the Jul 23 high. A break of this hurdle would be bullish.
