US NATGAS: Henry Hub Midday Update – Jul 8

• The 1.35 level in GPUSD appears to have met solid supply on several occasions in the past couple of weeks. This has enabled the latest leg of dollar strength to reinforce the technical bear theme for cable. Today’s low print came within 3 pips of the next key support at 1.3303, the May 18 low.
• Clearance of this price point would strengthen a bearish threat and pave the way for an extension towards initial targets of 1.3212 and 1.3159. Below here, there will inevitably be a lot of focus on an important pivot level at the psychological 1.30 mark, which would also coincide with the bear channel base, drawn from the Jan 27 high.
• The June BOE meeting approaches next week (18 June) and we have no further scheduled MPC speakers between now and then. And on hold decision is widely expected, but there are a number of data points that could still change the tone of the meeting, including this week’s release of the Agents Survey of Business Conditions scheduled on Friday.
• The market will also be very aware of the upcoming Makerfield parliamentary by-election, also on June 18, which has the potential to stoke political and fiscal uncertainty in the UK and further weigh on sterling.

Italy has announced it will be looking to sell E3.5-4.0bln of the new 3.00% Sep-29 BTP (ISIN: tba) at its auction this Thursday, June 11.

• The launch comes as expected by us in our daily issuance publications.
• "The Ministry of Economy and Finance announces that the auctions of the 7-year BTPs and with a maturity longer than 10 years, scheduled for the same day, will not be held due to the announced issuance through a syndicate". This was announced already earlier today with a mandate of a dual-tranche syndication, to be launched in the near future subject to market conditions (meaning, likely tomorrow).

• EUR/USD: Jun10 $1.1420-30(E2.1bln); Jun11 $1.1525-30(E1.5bln), $1.1625-35(E2.0bln); Jun12 $1.1500(E2.6bln), $1.1700(E1.5bln)
• USD/JPY: Jun10 Y160.00($1.2bln)
• EUR/GBP: Jun11 Gbp0.8650(E1.0bln)
• USD/CNY: Jun11 Cny6.7000($1.2bln)