EGBS: Only Light OAT Underperformance Into Cash Close Amid Political Headlines

• EUR/USD: Sep12 $1.1550(E1.7bln), $1.1600(E1.1bln), $1.1650(E1.4bln), $1.1670-75(E1.6bln), $1.1700(E2.5bln), $1.1724-35(E1.5bln) $1.1800(E1.5bln), $1.1850(E1.4bln); Sep15 $1.1690-00(E1.0bln); Sep16 $1.1700-15(E1.1bln), $1.1750(E1.1bln), $1.1800(E1.5bln)
• USD/JPY: Sep12 Y146.00($1.1bln), Y147.40-50($2.4bln), Y151.00($1.1bln); Sep15 Y150.00($1.0bln); Sep16 Y145.85-00($2.1bln), Y150.00($1.5bln)

Treasury futures are hovering near recent highs with TYZ5 +6 at 113-17 (10Y yield -.0421 at 4.0454%) ahead of the $39B 10Y Note auction re-open (91282CNT4) at the top of the hour, WI currently 4.047%, 20.8bp rich to last month's tail.

• August auction recap: Treasury futures dipped slightly (TYU5 -7 at 112-07.5, 4.2375% yld) after the $42B 10Y note auction (91282CNT4) tailed 1bp: drawing 4.255% high yield vs. 4.245% WI; 2.35x bid-to-cover vs. 2.61x prior.
• Peripheral stats: indirect take-up slipped to 64.23% vs. 65.42% prior; direct bidder take-up 19.61% from 23.70% prior; primary dealer take-up climbed to 16.87% vs. 10.87% prior.

• RES 4: 114-10   High Apr 7 (cont.)
• RES 3: 114-00   Round number resistance 
• RES 2: 113-26+ 2.764 proj of the Jul 15 - 22 - 28 price swing 
• RES 1: 113-21+ High Sep 5
• PRICE:‌‌ 113-17 @ 16:56 BST Sep 10
• SUP 1: 112-28+/112-14+ Low Sep 5 /  20-day EMA
• SUP 2: 111-28+ 50-day EMA
• SUP 3: 111-13+ Low Aug 18 and a key support  
• SUP 4: 110-25   Low Aug 1 

Treasury futures rallied sharply higher last week and the contract is holding on to the bulk of its latest gains. The move higher highlights an acceleration of the uptrend. Note too that moving average studies remain in a bull-mode position, highlighting a dominant uptrend. This paves the way for an extension through 113-21 next (pierced), the 2.618 projection of the Jul 15 - 22 - 28 price swing. Initial firm support to watch is 112-14+, the 20-day EMA.