US STOCKS: Late Wednesday Earnings, Thursday's Docket

• RES 4: 0.8747 76.4% retracement of the Feb 27 - Mar 16 bear leg
• RES 3: 0.8742 High Mar 31 and Apr 1 and a bull trigger
• RES 2: 0.8731 High May 18 
• RES 1: 0.8659/82 50-day EMA / High May 29
• PRICE: 0.8640 @ 17:25 BST Jun 15
• SUP 1: 0.8618 Low May 25
• SUP 2: 0.8610 Low Mar 16 and the bear trigger
• SUP 3: 0.8597 Low Aug 14 ‘25
• SUP 4: 0.8576 Low Jul 2 ‘25  

Trend signals in EURGBP remain bearish and S/T gains are - for now - considered corrective. Sights are on key support at 0.8610, the Mar 16 low. Clearance of this level would highlight an important medium-term bearish breakout. Key resistance to watch is 0.8742, the Mar 31 and Apr 1 high. Initial firm resistance is 0.8659, the 50-day EMA, recently pierced. A clear break of this average would highlight a short-term bullish development.      

• Oil prices extended their three-session decline to around 13% on Monday as further optimism regarding a peace deal in the Middle East buoys global risk sentiment. Alongside further gains for the major equity benchmarks, further short-term pressure has been placed on the US dollar, with the DXY currently 0.2% in the red as we approach the APAC crossover.
• Greenback weakness mechanically translates to EURUSD rising back to the 1.1600 handle, however depressed volatility levels has failed to spur much additional momentum. Resistance to watch is at 1.1640, the 50-day EMA, a clear break of which would signal a possible reversal.
• The risk rally has worked in favour of AUDUSD (+0.43%), which extends its recovery from last week’s lows to around 1.5%. A short-term bear cycle remains in play for the pair, and therefore these gains are considered corrective at this juncture. The recently breached 50-day EMA is the first notable resistance, located at 0.7109 as we approach tomorrows expected hold from the RBA.
• Price action for the Japanese yen has been notably contained in recent weeks, with USDJPY operating within a 1% range across the entirety of June and consolidating around 160.25 on Monday. However, close attention will be on tomorrow’s BOJ meeting/decision, especially given the BoJ is expected to hike rates and there should be mentions of the future pace of the bond buying programme.
• The Swedish Krona was the major beneficiary on Monday, and a 0.95% decline for NOKSEK emphasises the fresh Scandi divergence, helping the cross push cleanly below the 50-day EMA. A 3.4% pullback from the mid-May highs has likely cleaned up the positioning backdrop in NOKSEK ahead of central bank decisions this week, with the primary support level located around the 0.9800 area.
• Aside from Tuesday’s BOJ and RBA decisions, Chinese activity data, German ZEW and US import prices/building permits highlight the calendar.

EGBs and Gilts rallied Monday after the US and Iran reached a tentative ceasefire accord over the weekend.

• A much-awaited US-Iran memorandum of understanding due to be officially signed on Friday will see a 60-day negotiation, with the Strait of Hormuz opened in the meantime (subject to various caveats).
• That saw oil prices sink overnight, bringing front end yields lower in a bull steepening move.
• However, early gains faded somewhat. Heavy US corporate issuance (led by Nvidia seeking to raise at least $20B) weighed on Treasuries, in turn keeping a lid on global core FI.
• In data, Eurozone industrial production was in line with consensus.
• Both the German and UK curves bull steepened on the day, with Gilts outperforming at the short end but underperforming Bunds further down the curve.
• Periphery/semi-core EGB spreads tightened modestly.
• UK data/events dominate the week's European calendar, including CPI and labour market readings, the BOE decision Thursday, and the Makerfield  by-election.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is down 4.5bps at 2.572%, 5-Yr is down 4.8bps at 2.665%, 10-Yr is down 4.1bps at 2.954%, and 30-Yr is down 2.3bps at 3.526%.
• UK: The 2-Yr yield is down 6.2bps at 4.173%, 5-Yr is down 4.4bps at 4.326%, 10-Yr is down 2.4bps at 4.812%, and 30-Yr is down 0.1bps at 5.535%.
• Italian BTP spread down 1.3bps at 71.4bps / French down 0.8bps at 74.7bps