OUTLOOK: Price Signal Summary - Bear Threat In Gilts Remains Present
Apr-04 11:37
- In the FI space, Bund futures maintain a softer short-term tone. A deeper retracement would highlight a stronger bearish threat and the end of the recent corrective phase between Mar 18 - 27. The bear trigger lies at 131.23, the Feb 29 low. Clearance of this level would confirm a resumption of the downtrend that started last December. On the upside, a break of 133.48, the Mar 27 high, is required to reinstate a bullish theme.
- The gap lower on Tuesday in Gilt futures and the subsequent sell-off, highlights a developing bear threat. A continuation lower would signal scope for a test of key short-term support at 98.05, the Mar 15 low. Clearance of this level would strengthen a bearish theme. On the upside, key resistance and the bull trigger is unchanged at 100.37, the Mar 12 high. Initial resistance is at 99.332, the Apr 2 high.
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EUROZONE ISSUANCE: 3-month ESM Bills Results
Mar-05 11:33
| Type | 3-month bills |
| Maturity | Jun 6, 2024 |
| Amount | E1.05bln |
| Target | E1.1bln |
| Previous | E1.057bln |
| Avg yield | 3.818% |
| Previous | 3.802% |
| Bid-to-cover | 2.49x |
| Previous | 2.49x |
| Previous date | Feb 06, 2024 |
STIR: Fed Rate Path Starts Day Lower Ahead Of ISM Services
Mar-05 11:26
- Fed Funds implied rates have dipped 0-2bps overnight, pulling back off yesterday’s highs that had come close to recovering to levels seen shortly before Friday’s ISM mfg miss. European data were mixed rather than outright dovish.
- Cumulative cuts: 0.5bp Mar, 5.5bp May, 21bp Jun, 35bp Jul and 86bp Dec.
- The more heavily weighted ISM services index follows today.
- Today’s scheduled Fedspeak is limited to VC Supervision Barr (voter) on financial matters. Potential for surprise appearances like we saw yesterday with Bostic talking on fears of triggering pent-up exuberance, but Powell’s House testimony tomorrow looms large.
US 10YR FUTURE TECHS: (M4) Approaching Resistance At The 50-Day EMA
Mar-05 11:20
- RES 4: 111-24+ High Feb 13
- RES 3: 111-11+ 38.2% retracement of the Feb 1 - 23 bear leg
- RES 2: 111-06 50-day EMA
- RES 1: 111-02 High Mar 1
- PRICE: 110-31+ @ 11:08 GMT Mar 5
- SUP 1: 110-05+/109-25+ Low Mar 1 / Low Feb 23 and bear trigger
- SUP 2: 109-14+ Low Nov 28
- SUP 3: 109-12+ 1.764 proj of Dec 27 - Jan 19 - Feb 1 price swing
- SUP 4: 108-25+ 2.00 proj of Dec 27 - Jan 19 - Feb 1 price swing
The trend direction in Treasuries is unchanged and remains down, however, the contract is holding on to its recent gains. Attention is on resistance at 111-06, the 50-day EMA, where a clear break is required to signal a possible reversal. This would open 111-11+, 38.2% of the Feb 1 - 23 bear leg. On the downside, the bear trigger has been defined at 109-25+, the Feb 23 low. A break would resume the downtrend and open 109-14+, the Nov 28 low.
