MNI EXCLUSIVE: MNI Speaks to Former BOJ Executive Director Kazuo Momma

• In the FI space, Bund futures traded in a volatile manner last week and for now, remain below their recent highs. A bull cycle is in play and the latest pullback is considered corrective. A fresh short-term cycle high on Apr 7 reinforces a bullish theme. The contract has recently cleared 131.14, 76.4% of the Feb 28 - Mar 11 bear leg. This opens 132.56 next, the Feb 28 high. Initial firm support lies at 128.60, the Apr 9 low.
• A sharp sell-off in Gilt futures last week highlights a strong bearish theme. The contract has breached 90.55, the Mar 27 low. Clearance of this level confirms a full reversal of the Mar 27 - Apr 7 rally. Sights are on the 90.00 handle next, briefly pierced on Apr 9. A clear break of this level would signal scope for an extension towards a key support at 88.96, the Jan 13 low on the continuation chart. Initial resistance is at 91.84, the 20-day EMA.

• USDZAR is trading lower, as it extends the reversal from last week’s 19.9328 high (Apr 9). For now, a move down appears corrective and the support levels to watch are; 18.8496, the 20-day EMA, and 18.6089, the 50-day EMA. A break below the 50-day EMA would undermine the bull theme. A reversal higher would refocus attention on 19.9328 where a break would resume the uptrend.
• The path of least resistance in USDTRY is unchanged and remains up. It is difficult to determine upside price projections given the nature of the long-term trend, however, a retest of the 40.00 handle and the Mar 19 high just above 41.00, is likely near-term. A reliable trend support lies at 37.6973, the 20-day EMA.

SONIA FIX - Source: BBG/ICE

• 1M 4.41050 -0.0142
• 3M 4.27190 0.0076
• 6M 4.14700 0.0326
• 12M 3.97480 0.0667