CZK: Koruna Tad Softer

BTP Block trade, suggest buyer:

• IKZ5 1.13k at 119.77.

• Bund futures are -1 tick at 128.235, towards the middle/lower end of their session range as markets digest this morning’s September flash PMIs, sovereign supply and an uptick in equity/oil futures.
• Bunds saw some contained two-way swings around the German & French PMIs (political uncertainty and soft prices biased the French readings lower, while German readings were mixed, with output prices on the firmer side). The Eurozone-wide composite PMI was very slightly above consensus at 51.2 (vs 51.1 cons, 51.0 prior).
• Initial technical areas of interest in Bunds remain intact: Support around 128.01 (Sep 23 low) and 128.04, resistance at the 20-day EMA of 128.60.
• The German curve is lightly twist flatter (2-year yields up 0.5bps, 30-year yields down 1bp), with Schatz supply weighing into the 1030BST bidding deadline. The Schatz results were acceptable, albeit with slightly softer cover ratios than the previous outing.
• 30-year DDA books closed in excess of E32bln. Portugal is also holding a syndication today.
• 10-Year EGB spreads to Bunds are little changed to ~1bp tighter. No real signs of weakness for DSLs & PGBs around the ongoing syndication processes, with 10-Year PGBs actually outperforming on the day.
• ECB’s Kocher and Cipollone are scheduled to speak later today. 

• In the equity space, a bull cycle in S&P E-Minis remains intact and the contract traded to a fresh cycle high yesterday. Price has breached the 6700.00 handle and this signals scope for an extension towards 6787.63, a 1.382 projection of the Aug 1 - 15 - 20 price swing. Moving average studies remain in a bull-mode position, highlighting a dominant uptrend and positive market sentiment. Initial support to watch lies at 6616.34, the 20-day EMA.
• EUROSTOXX 50 futures are trading closer to their recent highs. The contract recently traded through resistance around the 20-day EMA - a bullish development - and the subsequent rally reinforces a bullish theme. The move signals potential for a climb towards 5525.00, the Aug 22 high and a bull trigger. On the downside, key support has been defined at 5302.00, the Sep 2 low. First support lies at 5409.70, the 20-day EMA.