OUTLOOK: Price Signal Summary - Pullback In Gold Appears Corrective
Jun-20 10:50
- On the commodity front, a bullish theme in Gold remains intact and this week’s pullback is considered corrective. Medium-term trend signals are bullish too - moving average studies are in a bull-mode position, highlighting a dominant uptrend. Resistance at $3435.6, the May 7 high, has been pierced. A clear break of this level would strengthen the uptrend and open $3500.1, the Apr 22 all-time high. Initial key support to monitor is $3279.3, the 50-day EMA.
- In the oil space, a bull cycle in WTI futures remains intact and the contract is trading closer to its recent high. Price action is likely to remain volatile near-term, and from a technical standpoint, the trend is in an extreme overbought position. A continuation higher would expose the $80.00 handle. A firm support is noted at $67.11, the Jun 13 low. A breach of this level would signal scope for a deeper retracement.
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EUROZONE DATA: Vacancy Rate At Lowest Since Q2 2021
May-21 10:50
The Eurozone preliminary Q1 vacancy rate, released yesterday, pointed to a continued gradual softening of labour demand. The seasonally adjusted rate was 2.4%, down from 2.5% in Q4 for the lowest since Q2 2021. This is consistent with a downward trajectory of the EC’s expected employment indicator.
- The Eurozone unemployment rate remains at historic lows of 6.2% despite the softening in labour demand. The minor uptick in the EC’s labour hoarding indicator provides some context for this dynamic.
- Across industries, the industry and construction vacancy rate fell to 2.0% from 2.2% in Q4, while services eased to 2.6% from 2.7% prior.
- Across countries, the vacancy rate fell two tenths in Germany to 2.8%, and a tenth in France (2.4% vs 2.5% prior) and Italy (2.0% vs 2.1% prior).
US TSYS: 30Y Yields Eye Highs Since 2023 With Trump Bill Vote Potentially Today
May-21 10:49
- Treasuries trade bear steeper with fiscal policy in focus amidst ongoing deliberations around President Trump’s “big, beautiful bill”.
- Today's 20Y auction again offers a test of US duration demand.
- Bloomberg wrote overnight that Trump is losing patience with the SALT caucus demands to significantly boost the deduction cap (BBG story here).
- However, since then, our political risk team notes that House Speaker Johnson had made progress with tentative agreements that could unlock support for a final vote as soon as today.
- Cash yields are 2.5-5.7bp higher on the day, with increases led by 30s. 5bp of the 5.7bp increase in 30Y yield is from real yields.
- 10Y and 30Y yields are back above their notable 4.50% and 5.00% levels, with 30s currently at 5.0269% with an eye on Monday’s 5.0353% that marked highs since Oct/Nov 2023 and before that 2007.
- 5s30s has lifted to 91.8bp but remains within the ytd high of 100bp on May 1.
- TYM5 trades at 109-26+ (-12) on solid volumes of 380k considering Bloomberg technical issues.
- The bear threat is still present, with last week’s low of 109-18+ (May 15 low) marking another step back towards a key support at 109-08 (Apr 11 low). Resistance is seen at 110-24+ (50-day EMA).
- Data: Weekly MBA applications (0700ET)
- Fedspeak: Barkin & Bowman in Fed Listens event (1215ET)
- Coupon issuance: US Tsy $16B 20Y Bond sale - 912810UL0 (1300ET)
- Bill issuance: US Tsy $60B 17W bill auction (1130ET)
PIPELINE: Corporate Bond Roundup: ADB, OKB, Turkiye & Kommunalbanken on Tap
May-21 10:44
- Date $MM Issuer (Priced *, Launch #)
- 05/21 $Benchmark Turkiye 7Y 7.75%a
- 05/21 $Benchmark Kommunalbanken +5Y SOFR+49
- 05/20 $Benchmark ADB 5Y SOFR+42
- 05/21 $Benchmark OKB 3Y +34
- $18.75B Priced Tuesday led by $7B Siemens 7-tranche package
