JGBS: JGB Futures Hold Above Lows, Curve Twist Flattens
No real reaction in JGBs through the opening statement and comments within BoJ Governor Ueda’s press conference. Futures off Tokyo lows of 136.03, last 136.14.
- Bears forced a break of the September 4 low (136.19), exposing round number support at 136.00, with the downtrend resuming.
- Fresh extension below 136.00 would target projection support (135.39).
- Japanese yields are 4bp higher to 4bp lower, 5s under the most pressure, with the curve twist flattening in the wake of the Bank’s hawkish hold.
- 5s30s trades to the lowest level seen since late July, last 193.8bp. Next support seen at the July 28 low (187.1bp).
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
STIR: Initial SONIA Reaction To CPI Fades, 11bp Cuts Priced Through Dec
GBP STIRs opened hawkishly in the wake of the CPI data, but the move fades, with European FI better bid, as noted in our early EGB bullet.
- Also note that we fleshed out our thoughts re: the data being unlikely to push back cut expectations substantially in a recent bullet. Please read that post for greater colour.
- The shallow degree of rate cuts priced through year-end also limits scope for a meaningful hawkish move.
- BoE-dated OIS now shows ~6bp of cuts through November, with ~11bp showing through year-end.
- SONIA futures are +1.0 to -1.0, with some contracts 3.5 off session lows. May lows go untested in SFIZ5, while June lows are untested in SFIZ6.
- Little of note on the UK macro calendar for the remainder of the day.
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
Sep-25 | 3.973 | +0.6 |
Nov-25 | 3.904 | -6.3 |
Dec-25 | 3.860 | -10.7 |
Feb-26 | 3.763 | -20.4 |
Mar-26 | 3.730 | -23.7 |
Apr-26 | 3.663 | -30.4 |
EQUITY TECHS: E-MINI S&P: (U5) Retracement Mode
- RES 4: 6600.00 Round number resistance
- RES 3: 6554.98 2.0% 10-dma envelope
- RES 2: 6523.63 1.764 proj of the May 23 - Jun 11 - 23 price swing
- RES 1: 6508.75 High Aug 15 and Alltime High
- PRICE: 6411.75 @ 07:26 BST Aug 20
- SUP 1: 6402.75 20-day EMA
- SUP 2: 6313.25 Low Aug 6
- SUP 3: 6282.00 50-day EMA
- SUP 4: 6239.50 Low Aug 1
The dominant uptrend in S&P E-Minis remains intact and the latest shallow retracement is considered corrective. Moving average studies are in a bull-mode position, highlighting a clear uptrend. A resumption of gains would pave the way for a climb towards 6523.63, a Fibonacci projection. On the downside, supports to watch are; 6402.75, the 20-day EMA, and 6282.00, the 50-day EMA.
WTI TECHS: (V5) Bears Remain In The Driver’s Seat
- RES 4: $77.85 - 2.794 proj of the Apr 9 - 23 - May 5 price swing
- RES 3: $75.65 - 2.500 proj of the Apr 9 - 23 - May 5 price swing
- RES 2: $74.25 - High Jun 23 and a bull trigger
- RES 1: $69.36 - High Jul 30 and key resistance
- PRICE: $62.28 @ 07:20 BST Aug 20
- SUP 1: $61.29 - Low Aug 13
- SUP 2: $57.71 - Low May 30
- SUP 3: $54.80 - Low May 5
- SUP 4: $54.03 - Low Apr 9 and a key support
WTI futures remain in a clear bear cycle and the contract continues to trade closer to its recent lows. A key support at $61.99, the Jun 30 low, has been breached, strengthening a bearish theme. A continuation lower would open $57.71, the May 30 low. Key short-term resistance has been defined at $69.36, the Jul 30 high. Clearance of this level would cancel a bear theme. Initial resistance to watch is $63.91, the 50-day EMA.
