US 10YR FUTURE TECHS: (M6) Corrective Cycle Still In Play
Apr-09 16:32
- RES 4: 112-16 61.8% retracement of the Mar 2 - 27 bear leg
- RES 3: 112-07 High Mar 18
- RES 2: 111-31 50.0% retracement of the Mar 2 - 27 bear leg
- RES 1: 111-20+ 50-day EMA & High Apr 08
- PRICE: 111-14 @ 17:29 BST Apr 9
- SUP 1: 111-04+ 20-day EMA
- SUP 2: 110-16/109-24 Low Apr 2 / Low Mar 27 and the bear trigger
- SUP 3: 109-22+ 1.764 proj of the Mar 10 - 13 - 18 price swing
- SUP 4: 109-12 2.000 proj of the Mar 10 - 13 - 18 price swing
Gains in Treasuries across both Wednesday and Thursday trade still appear corrective. Attention is on the next important resistance at 111-21, the 50-day EMA. A clear break of this average is required to signal scope for a stronger recovery. This would open 111-31, a Fibonacci retracement. Moving average studies are in a bear-mode position, highlighting a dominant downtrend. First key support to watch is 110-16, the Apr 2 low. A break would be bearish.
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BONDS: EGBs-GILTS CASH CLOSE: Geopolitical Relief Rally
Mar-10 16:23
European curves bull steepened sharply Tuesday on hopes for a de-escalation in the Middle East war.
- Cash EGBs and Gilts caught up in early trade with the overnight cross-asset rally triggered by US President Trump's comment following Monday's European close that the conflict with Iran could be resolved "very soon".
- The associated pullback in energy prices helped relieve pressure at the front end of curves especially, with periphery/semi-core EGB spreads tightening markedly (led by high-beta BTPs and GGBs) as equities bounced.
- Yields would pick up from early lows by mid-session, with 10Y Bund yields temporarily erasing their early fall (session high 2.879% vs prior close 2.859%), mirroring a bounce in oil.
- A final pullback in energy prices in afternoon trade would cement the rally, however. On the day, Gilts outperformed Bunds after recent underperformance, with the German curve actually twist steepening slightly (Buxl yield edged up).
- In data, German imports were much weaker than expected in January, but this was not a market mover.
- Most attention Wednesday (outside of geopolitical developments) will be on US CPI data, though we get some final February inflation data out of Germany and Portugal as well as Spanish retail sales, along with appearances by BOE's Breeden and ECB's Guindos and Schnabel.
Closing Yields / 10-Yr EGB Spreads To Germany
- Germany: The 2-Yr yield is down 8bps at 2.238%, 5-Yr is down 5.4bps at 2.468%, 10-Yr is down 3.1bps at 2.828%, and 30-Yr is up 0.4bps at 3.432%.
- UK: The 2-Yr yield is down 13.1bps at 3.859%, 5-Yr is down 10.2bps at 4.062%, 10-Yr is down 10bps at 4.547%, and 30-Yr is down 7.3bps at 5.229%.
- Italian BTP spread down 6.7bps at 68.6bps / Greek down 5.6bps at 68.2bps
FED: US TSY TO SELL $90.000 BLN 8W BILL MAR 12, SETTLE MAR 17
Mar-10 16:05
- US TSY TO SELL $90.000 BLN 8W BILL MAR 12, SETTLE MAR 17
FED: US TSY TO SELL $100.000 BLN 4W BILL MAR 12, SETTLE MAR 17
Mar-10 16:05
- US TSY TO SELL $100.000 BLN 4W BILL MAR 12, SETTLE MAR 17
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