FED: Reminder: Fed Speakers Tonight

• RES 4: 111-03   50.0% retracement of the Mar 2 - May 19 bear leg
• RES 3: 110-28+ High May 7, 2026
• RES 2: 110-14   38.2% retracement of the Mar 2 - May 19 bear leg
• RES 1: 110-10+ High Jun 26
• PRICE:‌‌ 109-20 @ 19:18 BST Jul 7
• SUP 1: 109-12+ Low Jul 02
• SUP 2: 109-06/108-25 Low Jun 22 and key S/T support / Low Jun 08 
• SUP 3: 108-08+ Low May 19 and the bear trigger
• SUP 4: 108-04   1.382 proj of Apr 17 - May 4 - 7 swing

The pullback last week in Treasuries highlights a key short-term resistance at 110-10+, the Jun 26 high. Recent gains have resulted in a breach of the 50-day EMA, and a move through resistance at 110-00+, the May 29 high. The break continues to highlight a possible short-term  reversal. Sights are on 110-14, a Fibonacci retracement. First key support to watch remains 109-06, the Jun 22 low. Clearance of this level would be bearish.

• RES 4: 1.1621 Trendline resistance drawn from the Apr 17 high
• RES 3: 1.1547 50-day EMA 
• RES 2: 1.1528 High Jun 18
• RES 1: 1.1473 High Jul 02
• PRICE: 1.1437 @ 19:25 BST Jul 7
• SUP 1: 1.1362/25 Low Jul 1 / Low Jun 24 and the bear trigger
• SUP 2: 1.1299 2.000 proj of the Jan 27 - Feb 6 - 10 price swing
• SUP 3: 1.1210 Low May 29 ‘25
• SUP 4: 1.1111 50.0% retracement of the Feb 3 ‘25 - Jan 27 bull leg 

The latest move higher in EURUSD appears corrective. The pair has pierced 1.1466, the 20-day EMA. A clear break of this average would signal scope for a stronger recovery, potentially towards 1.1547, the 50-day EMA. A bearish trend condition remains intact, highlighted by moving average studies that are in a bear-mode position. The bear trigger lies at 1.1325, the June 24 low. A break of this level would confirm a resumption of the downtrend.

European yields rose modestly to start the week.

• Price action coming back from the weekend was relatively subdued, with oil ticking down from overnight highs and equity markets relatively flat.
• Yields would rise from the lows as oil prices bounced, with Ukrainian strikes on Russian energy infrastructure possibly playing a role.
• Additionally, reports (later confirmed) of higher German net borrowing in 2027 contributed to curve steepening.
• In data, German factory orders outperformed consensus in May and were also revised upwards in April; similarly, Eurozone retail sales came in roughly as expected in May when considering an April upward revision.
• ECB's Schnabel kept to hawkish rhetoric in commentary at a policy panel in Rome.
• On the day, both the UK and German curves bear steepened, with Gilts slightly outperforming Bunds. Periphery/semi-core EGB spreads tightened very modestly.
• ECB's Lane speaks after the cash close. Tuesday's calendar includes German industrial production data, and the BOE Financial stability review.

Closing Yields / 10-Yr EGB Spreads To Germany

• Germany: The 2-Yr yield is up 0.9bps at 2.545%, 5-Yr is up 0.7bps at 2.657%, 10-Yr is up 1.3bps at 2.948%, and 30-Yr is up 2.5bps at 3.534%.
• UK: The 2-Yr yield is up 0.3bps at 4.125%, 5-Yr is up 0.6bps at 4.31%, 10-Yr is up 1.1bps at 4.793%, and 30-Yr is up 1.9bps at 5.536%.
• Italian BTP spread down 0.2bps at 77bps / French OAT down 0.5bps at 78.9bps