ENERGY: Norway July Oil and Gas Output Rose More the Forecast

Early London flow of note includes a ~5K screen buyer of TYU5 at 111-01+/02, which has helped underpin the rally and took the contract to fresh session highs at 111-02+.

It's hard to identify an overt driver for the USD weakness/bond rally this morning, especially given the scope of the moves in FI and lack of meaningful, immediate headline flow surrounding the moves.

• Some have pointed to a BBG sources story noting that “EU envoys are set to meet as early as this week to formulate a plan for measures to respond to a possible no-deal scenario with U.S. President Trump, whose tariff negotiating position is seen to have stiffened ahead of an Aug. 1 deadline. The overwhelming preference is to keep negotiations with Washington on track in a bid for an outcome to the impasse ahead of next month’s deadline.”
• Even if that has drove the rally in bonds, it is hard to see how the story is particularly positive for European equities and the EUR (granted, we could see a return to the theme of higher tariffs/trade barriers being a market negative for the USD).
• The move in those assets could come from the “made for Germany” initiative moving closer to reality, although the idea of the initiative has been doing the rounds for at least a few weeks (as businesses and investors in Germany look to scale up dialogue with the government and enhance investment in the Eurozone’s largest economy).
• News that Japanese PM Ishiba intends to stay on despite the loss of control of the country’s upper house may also be a factor, although we won’t get a clearer read on Japanese market reaction until Tuesday, when they reopen after a long weekend.

• RES 4: $40.285 - 1.618 proj of the Apr 7 - 25 - May 15 swing
• RES 3: $40.000 - Psychological round number 
• RES 2: $39.655 - 1.500 proj of the Apr 7 - 25 - May 15 swing
• RES 1: $39.132 - High Jul 14     
• PRICE: $38.339 @ 08:04 BST Jul 21  
• SUP 1: $37.096 - 20-day EMA
• SUP 2: $35.820 - 50-day EMA 
• SUP 3: $33.967 - Low Jun 3 
• SUP 4: $32.615 - Low May 22 

Trend signals in Silver continue to point north with the metal trading closer to its recent highs. On Jul 11, Silver cleared a key short-term resistance at $37.317, the Jun 18 high. This confirmed a resumption of the uptrend. Note too that moving average studies are in a bull-mode position, highlighting a clear uptrend. Sights are on the $39.655 next, a Fibonacci projection. On the downside, initial support to watch lies at $37.096, the 20-day EMA.