BUNDS: Some early selling interest into the EU Session
- There was some early selling interest in Bund pre Cash open, helping US Treasuries ticking lower as we head into the European session, TYH5 was sold in over 3k and USH5 1k, but lighter Volumes in Europe so far.
- German Factory orders saw a big beat, but not a known market mover.
- The range in the German contract is still fairly contained, following a much calmer overnight session.
- Risk remains tilted to the upside for the Future, but the next initial resistance noted at 133.86 held Yesterday, after only managing a 133.71 high.
- Supports are at 132.72, but more importantly 132.34 (gap).
- Notable Data for the session are EU retail sales, US IJC, and UK DMP, but the attention will now turn to the US NFP/AHE Tomorrow.
- Risk event will be on the BoE and the expected 25bps Cut.
- SUPPLY: Spain 3s, 7s, 30s, France 10s, 12s, 30s, these can always weigh into respective bidding deadlines.
- SPEAKERS: Bailey's presser, he also attends a private dinner tonight (no text), ECB Vujcic, Nagel, Escriva, US Fed Waller, Logan.
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EURJPY TECHS: Trend Structure Still Bullish
- RES 4: 166.53 2.0% 10-dma envelope
- RES 3: 166.10 High Nov 6
- RES 2: 165.04 High Nov 15 and a key short-term resistance
- RES 1: 164.40 Intraday high
- PRICE: 164.11 @ 07:19 GMT Jan 7
- SUP 1: 162.46/160.91 20-day EMA / Low Jan 2
- SUP 2: 160.54 50.0% retracement of the Dec 3 - 30 bull cycle
- SUP 3: 159.51 61.8% retracement of the Dec 3 - 30 bull cycle
- SUP 4: 158.67 Low Dec 11
EURJPY traded higher Monday but remains below the Dec 30 high. The recent move down appears corrective and a bullish S/T condition is intact. The next support to watch lies at 160.54, 50.0% of the Dec 3 - 30 bull cycle. The 61.8% level is at 159.51. Monday’s gains are a positive development, a resumption of the uptrend would open 165.04, the Nov 15 high. Clearance of this hurdle would expose 166.69, the Oct 31 high and a major resistance.
BUNDS: A busy day ahead
- There's very little change for Bund, a lighter and tighter overnight session, following a busier start Yesterday.
- The contract closed its opening gap up to 132.50 Yesterday, but failed to see further upside traction.
Resistance moves up to 132.71, followed by 133.10 initially. - Main immediate support is unchanged at 132.00.
- On the Data front, it is picking up today and it includes, France, Italy, EU prelim CPIs, and out of the US, JOLTS and ISM Services.
- The ECB will also release 1yr and 3yr CPI expectations.
- SUPPLY: UK £2.25bn 30yr (equates to 31k Gilt) should weigh, Austria 2029, 2071, Germany €4.5bn Schatz (equates to 42k Schatz) should weigh, US sells $39bn of 10yr Reopening.
- SYNDICATION; Belgium 10yr, Slovenia 30yr Benchmarks.
- SPEAKERS: Fed Barkin.
BTP TECHS: (H5) Bear Cycle Remains In Play
- RES 4: 123.34 High Dec 11 and key resistance
- RES 3: 122.85 High Dec 12
- RES 2: 121.94 High Dec 13
- RES 1: 120.45/120.66 High Jan 2 / 20-day EMA
- PRICE: 119.49 @ Close Jan 6
- SUP 1: 119.11 Low Nov 18
- SUP 2: 118.80 76.4% retracement of the Nov 7 - Dec 11 bull cycle
- SUP 3: 118.51 Low Nov 8
- SUP 4: 117.40 Low Nov 7 and a key support
The current bear cycle in BTP futures remains in play and the latest fresh cycle low reinforces current conditions. The contract has recently breached the 20-day EMA and sights are on 118.80, a Fibonacci retracement point. Clearance of this level would strengthen the bearish theme. Key resistance and the bull trigger has been defined at 123.34, the Dec 11 high. Initial firm resistance is seen at 120.66, the 20-day EMA.
