JGBS: Off Lows In Tokyo
JGB futures edged away from their overnight trough during the Tokyo session, although the contract has stuck to a narrow range, -20 vs. settlement into the close.
- Cash JGBs run little changed to 2.5bp cheaper on the day, bear steepening. Much of the long end has stuck to ranges established in early dealing after the initial cheapening adjustment in lieu of Tuesday’s core global FI moves (10s being the exception, although they are off session cheaps).
- There hasn’t been anything in the way of meaningful domestic news flow to digest since the Tokyo open, although there has been confirmation that U.S. House Speaker Pelosi will visit Japan on Thursday, in what will be another leg of her heavily-watched trip to the Asia-Pacific region.
- The breakdown of the latest round of BoJ Rinban operations revealed slight moderations in cover ratios across the 1- to 5- & 10- to 25-Year zones of the curve, although that didn’t have any tangible impact on JGBs.
- 10-Year JGBi supply headlines tomorrow’s docket.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
RATINGS: S&P Affirmed Finland On Friday
Sovereign rating reviews of note from Friday included:
- S&P affirmed Finland at AA+; Outlook Stable
US TSYS: FVQ2 112.50 Puts Lifted
The last hour or so has seen some screen flow in FVQ2 112.50 puts, with paper paying 0-32 up to 0-33 on 3.0K (delta of -40% to -41%).
EURGBP TECHS: Bullish Focus
- RES 4: 0.8852 50.0% retracement of the Mar ‘20 - Mar ‘22 bear leg
- RES 3: 0.8762 1.00 proj of the Apr 14 - May 12 - 17 price swing
- RES 2: 0.8721 High May 26 2021 and Jun 15 / bull trigger
- RES 1: 0.8679 High Jul 1
- PRICE: 0.8621 @ 06:24 BST Jul 4
- SUP 1: 0.8551 Low Jun 30
- SUP 2: 0.8530 50-day EMA
- SUP 3: 0.8486 Low Jun 9
- SUP 4: 0.8433 Low May 23
EURGBP is trading in a choppy manner but trend conditions remain bullish and a dip-buying theme was evident last Thursday’s. The cross is also trading above important support levels and moving average studies remain in a bull mode condition, highlighting an uptrend. Attention is on a retest of 0.8721, the Jun 15 high and bull trigger. A break would resume the bull trend. Firm support is at the 50-day EMA - it intersects at 0.8530.
