US TSYS/OVERNIGHT REPO: Secured Rates Ticked Up Tuesday, May Subside Wednesday
Secured rates ticked up Tuesday as largely expected, primarily on account of Treasury bill settlements ($55B in net cash today). SOFR rose 2bp to 4.36%, with BGCR and TGCR up 1bp apiece. Upside pressure is due to relent today, but could subsequently pick up with $42B in bill settlements on Thursday, followed by $35B in coupon settlements Friday.
REPO REFERENCE RATES (rate, change from prev. day, volume):
* Secured Overnight Financing Rate (SOFR): 4.36%, 0.02%, $2804B
* Broad General Collateral Rate (BGCR): 4.34%, 0.01%, $1175B
* Tri-Party General Collateral Rate (TGCR): 4.34%, 0.01%, $1144B
New York Fed EFFR for prior session (rate, chg from prev day):
* Daily Effective Fed Funds Rate: 4.33%, no change, volume: $114B
* Daily Overnight Bank Funding Rate: 4.33%, no change, volume: $247B
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BONDS: German 30-Year Yields Near '23 High Before Market Stabilises
German 30-Year yields get within 0.5bp of their ’23 high at 3.263%, helping keep the focus on higher global long end yields and steeper curves.
- Little fresh to note on the news flow front, with fiscal dynamics presenting focal points across many of the core global DM curves.
- German curve twist steepens on the day, with bonds outperforming swaps.
- S&P 500 e-minis then close their overnight gap lower through the NY cash open, with bonds firming at the margin in sync (TY & Bund futures off lows).
EQUITY TECHS: E-MINI S&P: (U5) Bulls Remain In The Driver’s Seat
- RES 4: 6402.44 1.382 proj of the May 23 - Jun 11 - 23 price swing
- RES 3: 6381.00 1.764 proj of the Apr 7 - 10 - 21 price swing
- RES 2: 6356.12 1.236 proj of the May 23 - Jun 11 - 23 price swing
- RES 1: 6335.50 High Jul 10
- PRICE: 6284.00 @ 14:21 BST Jul 14
- SUP 1: 6246.25 Low Jul 7
- SUP 2: 6201.21/6054.38 20- and 50-day EMA values
- SUP 3: 5811.50 Low May 23
- SUP 4: 5645.75 Low May 7
The trend condition in S&P E-Minis remains bullish and short-term weakness is considered corrective. Recent activity has resulted in a break of resistance at 6128.75, the Jun 11 high. The breach confirmed a resumption of the uptrend that started Apr 7. This was followed by a break of key resistance and a bull trigger at 6277.50, the Feb 21 high. Sights are on 6356.12, a Fibonacci projection. Key support is at the 50-day EMA, at 6054.38.
