DUTCH AUCTION PREVIEW: On offer next week

• Treasuries are off lows although still sit bear steeper from Friday’s close in a “sell the US” theme following Trump’s doubling of steel and aluminum tariffs to 50% late Friday.
• It’s with a backdrop of the Trump administration’s higher growth rather than spending cuts approach to debt stabilization.
• Bloomberg earlier today on some major investment firms’ policies linked to long end woes: “For DoubleLine Capital, there are two approaches to consider when it comes to 30-year US Treasuries: either avoid them, to the degree they can, or outright short them.”
• Today sees manufacturing surveys in focus, with heightened sensitivity as markets assess the sector's ongoing handling of tariff policy changes and heightened uncertainty.
• Cash yields are 1.5-3.5bp higher on the day, with increases led by 10s through to 30s.
• 2s10s sits at 52.4bp (+1.5bp) whilst 5s30s at 98.0bps (+1.0bp) earlier touched a high of 100.23bps (ask price) to return close to ytd highs of 101.4bp on May 22.
• TYU5 trades at 110-21+ (-02+) off a low of 110-18 that equalled Friday’s low, on moderate volumes of 315k.
• Whilst a bear cycle remains in play, with support at 109-26 (May 29 low), last week saw a piercing of key resistance at 110-23 (May 16 high). Friday’s high of 110-30 now marks initial resistance before 111-05+ (May 9 high).
• Data: S&P Global US PMI mfg May final (0945ET), ISM mfg May (1000ET), Construction spending (1000ET)
• Fedspeak: Logan Q&A (1015ET), Goolsbee Q&A (1245ET), Powell opening remarks (1300ET, text only)
• Bill issuance: US Tsy to sell $76bn 13-W, $68bn 26-W bills

• On the commodity front, a bullish theme in Gold remains intact and recent gains signal the end of the corrective phase between Apr 22 - May 15. Medium-term trend signals are bullish too - moving average studies are in a bull-mode position, highlighting a dominant uptrend. A resumption of gains would open $3435.6 next, the May 7 high. Key support and the bear trigger to watch, has been defined at $3121.0, the May 15 low. First support lies at $3213.7, the 50-day EMA.
• In the oil space, WTI futures are firmer today. The contract traded to a fresh short-term cycle high on May 21 before finding resistance. A bear threat remains intact and the recovery since Apr 9, appears corrective. Key resistance is $62.47, the 50-day EMA. It has again been pierced, a clear break of it would highlight a stronger reversal and open $65.82, the Apr 4 high. For bears a reversal lower would refocus attention on $54.33, the Apr 9 low and bear trigger. First support lies at $59.74/54.33, the May May 30 low. 

• RES 4: 112-04+ High May 2
• RES 3: 111-25   High May 7 
• RES 2: 111-05+ High May 9 
• RES 1: 110-30   High May 30 and today’s intraday high
• PRICE:‌‌ 110-20+ @ 11:26 BST Jun 2
• SUP 1: 109-26/12+ Low May 29 / 22 and the bear trigger
• SUP 2: 109-09+ Low Apr 11 and key support
• SUP 3: 109-00   Round number support
• SUP 4: 108-25+ 0.764 proj of the Apr 7 - 11 - May 1 price swing

A bear cycle in Treasury futures remains in play for now, and recent short-term gains still appear corrective. However, the contract has breached an important resistance at 110-23, the May 16 high. A clear break of this level would undermine a bearish theme and highlight a stronger reversal, exposing 111-05+, the May 9 high. On the downside, a reversal lower would refocus attention on the bear trigger at 109-12+.