OUTLOOK: Price Signal Summary - Resistance In Bunds Remains Exposed
Jun-13 11:26
- In the FI space, a bull cycle in Bund futures remains intact and this week’s gains reinforce current conditions. Price has pierced key resistance at 131.85, the Apr 22 high and a bull trigger. A clear break of this hurdle would confirm a resumption of the uptrend that has been in place since Mar 11 and would open 132.00 and above. Key short-term support has been defined at 130.12, the Jun 5 low. Short-term weakness is - for now - considered corrective.
- A bullish condition in Gilt futures remains intact and today’s move lower from the session high, is considered corrective. Recent gains mark an extension of the breach of resistance at 91.87, the May 20 high. This signals scope for a test of 93.73 next, a 1.764 projection of the May 22 - 27 - 29 price swing. Note the uptrend is in overbought territory, a stronger pullback would unwind this position. Support lies at 92.80, the Jun 12 low, and 91.98, the 20-day EMA.
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OUTLOOK: Price Signal Summary - Bear Cycle In Gilts Extends
May-14 11:24
- In the FI space, for now, a short-term bearish theme in Bund futures remains intact. The contract has traded through support at the 50-day EMA, at 130.53. This signals scope for a deeper retracement and this week’s extension strengthens the current bearish threat. A continuation lower opens 129.28, 50.0% of the Mar 11 - Apr 7 rally. It is still possible that the move down since Apr 22 is a correction. Initial resistance to watch is 130.72, the 20-day EMA.
- The latest pullback in Gilt futures appears corrective - for now. However, the contract has traded through support at the 50-day EMA, at 92.46. The breach signals scope for a deeper retracement and Monday’s move down resulted in a print below 91.73, the Apr 17 low. An extension of the bear leg has exposed 91.43, the Apr 15 low (pierced). A clear break of this level would expose 90.92, the 76.4% retracement of the Apr 9 - May 2 rally. Initial firm resistance is seen at 92.57, the 20-day EMA. A breach of this hurdle would ease bearish pressure.
EGB SYNDICATION: Latvia 5-year benchmark: Final Terms
May-14 11:23
- EU1b 5Y Fixed (May 21, 2030) at MS+65 (MNI saw a good chance for a E1.0-1.5bln transaction size)
- Revised guidance MS+70a (+/-5) will price in range, guidance MS+80 area
- Books above EU3.4b (including JLM interest): Leads
- Coupon: Annual, act/act ICMA
- Format: Reg S CAT1, registered, senior unsecured
- Settlement: May 21, 2025
- ISIN: XS3075496896
- Bookrunners: BNPP (B&D), GS, JPM
- Timing: May price today
Details as per Bloomberg
US DATA: A Tentative Pause In Tighter Mortgage Lending Standards
May-14 11:16
MBA composite mortgage applications increased 1.1% last week (sa) to essentially hold steady after a noisy period on swings in mortgage rates. Spreads to swap rates have stopped climbing although mortgage rates look set for a further increase ahead.
- Overall applications stand at 53% of 2019 levels, close to the 51.5% in late March ahead of tariff announcements that sparked large gyrations in rates,
- That equates to 64% vs 61% for new purchase applications and 41% vs 41% for refis.
- The 30Y conforming rate ticked up 2bp last week to 6.86% despite an 11bp increase in the average 10Y swap rate over the week.
- It sees the mortgage rate to swap spread tighten for the first time last March, to 306bp from 315bp at what had been the widest since Feb 2024.
- That could mark a peak in what has been an additional 30-35bp tightening in lending standards since April but is just one week of data.
- Further mortgage rate increases are likely ahead with the 10Y swap rate currently trading 13bp higher than last week’s average.
