US: MNI POLITICAL RISK - White House Dismisses Need For War Powers

OI data points to a modest round of net short cover during yesterday’s uptick in gilt futures, with OI falling by ~2.8K lots or ~0.25% as the contract ticked higher on the day.

• In the FI space, trend signals in Bund futures remain bearish and - for now - short-term gains are considered corrective. Note that resistance at the 20-day EMA, at 126.01 has been breached and this signals scope for a continuation higher near term. The next important resistance is 126.72, the 50-day EMA. A clear breach of it would strengthen a bull theme. A reversal lower would highlight the end of the correction and expose the bear trigger at 124.25, Mar 27 low.
• Gilt futures traded higher earlier today, extending the corrective bounce from its recent low of 85.91 on Mar 23. The trend condition remains bearish and the move higher is allowing a recent oversold trend condition to unwind. A continuation higher would open 89.82, the 50.0% retracement of the bear leg between Feb 27 - Mar 23. A reversal lower would signal the end of the correction and open 85.59, a 2.500 projection of the Feb 27 - Mar 3 - 4 price swing.

• Latest flow includes large May 10Y call buy:
  • +37,000 TYK6 112.5 calls, 14 ref 111-08.5/0.20%
  • 3,500 TYK6 112.25 calls, 18 ref 111-07.5
  • 2,200 FVK6 108/108.25 put spds ref 108-10