JAPAN: House Of Councillors Election Preview

The Belgian Debt Agency has announced it will be looking to sell the following at its auction next Monday, June 23:

• the 0.10% Jun-30 OLO (ISIN: BE0000349580)
• the 3.10% Jun-35 OLO (ISIN: BE0000363722)
• the 0.40% Jun-40 OLO (ISIN: BE0000350596)
   

The June National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index hit a joint 29-month low and 3rd-weakest since 2012 at 34, down sharply from 40 prior and continuing the overall decline since a post-2024 election burst of optimism. 

• While the index of future sales merely edged 1 point lower to an 18-month low 42, present sales dropped 8 points to 37, a 29-month low and the biggest one-month drop in 34 months. Prospective buyer traffic also fell 2 points to 23, an 18-month low.
• Falls were seen across all 4 geographical regions.
• As such the nascent pickup a the start of the year has fully reversed, and if anything, prospects look as bleak as ever. The report notes "the use of price incentives increased sharply in June as the housing market continues to soften", with 37% of builders cutting prices, a record in a short series (tracking started in 2022) but notably up from 34% in May and 29% in April.
• Per the NAHB: “Buyers are increasingly moving to the sidelines due to elevated mortgage rates and tariff and economic uncertainty...To help address affordability concerns and bring hesitant buyers off the fence, a growing number of builders are moving to cut prices.”
• The NAHB says that "given current market conditions, NAHB is forecasting a decline in single-family starts for 2025". Data through April suggests that's very likely to be the case (927k SAAR, 2nd weakest since April 2023, and down from 1,078k at end-2024).
• In turn, with multi-family starts steady/lower, there is a good case for residential investment to drag on GDP this year after a rebound in 2024, unless there is a sudden and sustained reversal lower in mortgage rates.

• RES 4: 111-30   76.4% retracement of the May 1 - 22 downleg
• RES 3: 111-21   1.0% 10-dma envelope
• RES 2: 111-14+ High Jun 5 & 61.8% of the May 1 - 22 downleg
• RES 1: 111-13   High Jun 13 
• PRICE:‌‌ 110-18+ @ 16:01 BST Jun 17
• SUP 1: 109-28   Low Jun 6 / 11         
• SUP 2: 109-12+ Low May 22 and the bear trigger 
• SUP 3: 109-09+ Low Apr 11 and key support
• SUP 4: 108-25+ 0.764 proj of the Apr 7 - 11 - May 1 price swing

Treasury futures continue to trade below key resistance and its recent high of 111-14+,  a Fibonacci retracement and the Jun 5 high. Clearance of this hurdle would be bullish and highlight a stronger reversal. This would open 111-30, a Fibonacci retracement. On the downside, support to watch lies at 109-28, the Jun 6 / 11 low. Clearance of this level would be bearish and open the bear trigger at 109-12+, the May 22 low.