OUTLOOK: Price Signal Summary - Bear Threat In Gilts Remains Present
Aug-29 11:12
* In the FI space, Bund futures continue to trade above their recent lows and the contract is hold...
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OPTIONS: Expiries for Jul30 NY cut 1000ET (Source DTCC)
Jul-30 11:09
- EUR/USD: $1.1525(E765mln), $1.1550(E902mln), $1.1700-10(E1.1bln), $1.1800(E1.7bln)
- USD/JPY: Y147.50($878mln), Y148.25-30($989mln), Y148.65($945mln), Y149.00($853mln)
- AUD/USD: $0.6550(A$1.0bln), $0.6600-10(A$1.2bln)
- USD/CAD: C$1.3695-10($969mln), C$1.3770-75($1.7bln)
US TSYS: TYA Tests Resistance Ahead Of Important Docket
Jul-30 11:07
- Treasuries have recently firmed, helped by a contained bid in EGBs seemingly following German budget figures, modestly extending yesterday’s sizeable bull flattening.
- It’s ahead of a busy session that sees ADP employment, flash GDP estimates for Q2, Treasury’s Quarterly Refunding Announcement and then the FOMC (preview links below). President Trump will also make a final call on yesterday’s touted China tariff truce extension.
- Cash yields are 0.3-0.8bp lower on the day, with the long-end lagging declines. 10Y yields of 4.314% still target a test down to 4.30%.
- TYU5 has recently nudged up to a session high of 111-14+ (+ 03) having earlier kept to a narrow range of 111-09+ to 111-13, on modest cumulative volumes of 275k.
- It tests resistance at 111-14+ (Jul 22 high) after which lies 111-28 (Jul 3 high). To the downside, support is seen at 110-19+ (Jul 24 low).
- Data: ADP employment Jul (0815ET), GDP/PCE 2Q A (0830ET), Pending home sales Jun (1000ET)
- Fed Preview: FOMC decision 1400ET, presser 1430ET. https://media.marketnews.com/Fed_Prev_Jul2025_With_Analysts_002622ac0e.pdf
- QRA Preview: 0830ET. https://media.marketnews.com/MNI_US_Deep_Dive_Issuance_2025_07_Refunding_e2af296ce5.pdf
- Monday’s Treasury borrowing estimates were almost exactly in line with MNI's estimates. We would characterize the current quarter as slightly on the high side of the median analyst expectation, with the latter quarter fairly close to expectations given what is usually a wide range for the further-out quarter. It should have little to no impact on expectations for Wednesday's Refunding announcement.
- Bill issuance: US Tsy $65B 17W bill auction (1130ET)
- Politics: Trump to make final call on a China tariff truce extension today. He also signs a Congressional Bill at 1330ET (closed press) and delivers remarks on Making Health Technology Great Again (1600ET)
US TSY FLOWS: US 10yr Yield Targets 4.30%
Jul-30 11:06
- As noted on the Bund Open, the early focus should be on the US Treasuries, and while the moves have been slow and gradual, the 10yr still target a test down to 4.30% in Yield Term.
- This is now close by, up to circa 111.16+
