EGBS: Major Futures Rally; 100bp Support Eyed In BTP/Bund
Major EGB futures have rallied this morning, without an obvious headline trigger. Participants appear to have digested this week’s soft US data and weaker oil prices, and taken the opportunity to enter longs at attractive yield levels.
- Bund futures have extended to fresh intraday highs of 130.58 (+65 ticks today), piercing the 20-day EMA at 130.53. Participants may look to close the gap to the May 9 close of 130.76, with round number resistance then seen at 131.00.
- The German curve has bull flattened, with 30-year yields down 6bps.
- The psychological 100bp handle remains the focus for the 10-year BTP/Bund spread, which currently hovers around 100.5bps.
- Broader EGB spreads to Bunds are generally little changed, with GGBs widening slightly. Portuguese and Greek ratings reviews are eyed after the close, with the Portuguese election also crossing over the weekend.
- This morning’s Eurozone data and ECB speakers have not moved the needle. Chief Economist Lane speaks on a panel at 1600BST.
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GREECE AUCTION RESULTS: 3.875% Mar-29 GGB
| 3.875% Mar-29 GGB | |
| ISIN | GR0124035693 |
| Amount | E200mln |
| Avg yield | 2.34% |
| Bid-to-cover | 5.19x |
| Avg Price | 105.620 |
| Pre-auction mid | 105.250 |
EQUITIES: Stock Weakness Pervades on Trump's Chips Measures
A reversal higher in S&P E-Minis last week highlights the start of a corrective cycle. The trend condition has been oversold following recent weakness and the move higher is allowing this set-up to unwind. Eurostoxx 50 futures continue to trade above their recent lows. The latest bounce highlights a corrective cycle and if this is correct, marks an unwinding of the recent oversold trend condition.
- Japan's NIKKEI closed lower by 347.14 pts or -1.01% at 33920.4 and the TOPIX ended 15.32 pts lower or -0.61% at 2498.03.
- Elsewhere, in China the SHANGHAI closed higher by 8.342 pts or +0.26% at 3276.004 and the HANG SENG ended 409.29 pts lower or -1.91% at 21056.98.
- Across Europe, Germany's DAX trades lower by 142.92 pts or -0.67% at 21109.31, FTSE 100 lower by 38.85 pts or -0.47% at 8206.87, CAC 40 down 56.75 pts or -0.77% at 7278.54 and Euro Stoxx 50 down 43.18 pts or -0.87% at 4927.54.
- Dow Jones mini down 54 pts or -0.13% at 40492, S&P 500 mini down 30 pts or -0.55% at 5395.5, NASDAQ mini down 218.5 pts or -1.15% at 18729.5.
COMMODITIES: Gold Firms Further, Hits New High
The trend condition in Gold remains bullish and today’s extension reinforces current conditions. The yellow metal has traded to another fresh all-time high and confirmed a resumption of the primary uptrend. A bearish theme in WTI futures remains intact and the rally on Apr 9 is - for now - considered corrective. The move higher is allowing an oversold trend condition to unwind. Recent weakness has resulted in the breach of a number of important support levels.
- WTI Crude up $0.58 or +0.95% at $61.93
- Natural Gas down $0.06 or -1.71% at $3.27
- Gold spot up $75.77 or +2.35% at $3306.47
- Copper down $4.65 or -0.99% at $463.2
- Silver up $0.71 or +2.18% at $33.024
- Platinum up $0.9 or +0.09% at $963.43
