EGB OPTIONS: Large Bund downside
Aug-17 10:50
RXV2 146p, bought for 51 and 53 in 15k (ref 151.75 in dec)
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US TSYS: Treasuries Bull Steepen With Risk On
Jul-18 10:44
- Cash Tsys have largely moved lower since the late open with a Japanese holiday as part of risk on moves with S&P e-minis continuing Friday’s move higher although with another wave of earnings reports potential triggers ahead.
- Relatively more restrained commentary from Fed officials leaning towards 75bps rather than 100bps next week has seen a modest bear steepening, doing little to change the recent inversion with 2s10s hovering only just above -20bps.
- 2YY +2.7bps at 3.147%, 5YY +3.6bps at 2.0732%, 10YY +3.9bps at 2.954% and 30YY +3.5bps at 3.110%.
- TYU2 trades 5+ ticks lower at 118-15 at the low end of Friday’s range on volumes still lagging after the Japanese holiday. There is a bullish focus, with resistance eyed at 119-06 (Jul 13 high) after which sits the bull trigger at 120-16+ (Jul 6 high).
- Data: Limited to NAHB housing market with a modest cooling expected before TIC flows late on.
- Bill issuance: US Tsy $54B 13W, $42B 26W bill auctions – 1130ET
PIPELINE: BMO on Tap, Lenovo Multi-Tranche Investor Calls
Jul-18 10:33
- Date $MM Issuer (Priced *, Launch #)
- 07/18 $Benchmark Bank of Montreal 3Y SOFR+82a
- 07/18 $Benchmark Lenovo multi-tranche investor calls
- 07/15 No new issuance Friday, $15.55B total priced on week, $30.85B/month
US 10YR FUTURE TECHS: (U2) Bullish Focus
Jul-18 10:32
- RES 4: 121-28+ 1.382 proj of the 14 - 23 - 28 price swing
- RES 3: 121-10 1.236 proj of the 14 - 23 - 28 price swing
- RES 2: 120-19+ High May 26 and a key resistance
- RES 1: 119-06/120-16+ High Jul 13 / High Jul 6 and the bull trigger
- PRICE: 118-13+ @ 11:21 BST Jul 18
- SUP 1: 117-18/12 Low Jul 8 / 50.0% of the Jun 14 - Jul 6 rally
- SUP 2: 116-11 Low Jun 28 and a key near-term support
- SUP 3: 115-20 Low Jun 17
- SUP 4: 114-05+ Low Jun 14 and the bear trigger
Treasuries continue to consolidate - quickly reverting after any periods of intraday strength/weakness. The outlook remains bullish and the recent pullback is considered corrective. Key short-term support is at 116-11, Jun 28 low where a break would strengthen a bearish threat and signal scope for a deeper retracement. On the upside, attention is on the short-term bull trigger at 120-16+, the Jul 6 high. A break resumes the uptrend.
