BUNDS: Tariff Threats remain at the forefront
Jul-11 06:19
- A wider Overnight traded session for Bund Overnight, so far a 25 ticks range for the contract.
- Despite the 9th July deadline on Tariffs moving to the 1st August, Trump threats are continuing after hinting of a broad 15%-20% across the Board without forgetting Canada, where plans there are to raise tariffs from 25% to 35% on August 1st, while leaving USMCA exemption unchanged.
- For Bund Futures, the near term risk is unchanged and to the downside, the 10yr Yield printed a new high Yesterday, above the May's high with a 129.38 low print.
- Next supports are unchanged, at 129.19 and 128.97.
- Small resistance is at 129.77, but most will look at 130.08, Yesterday's high.
- The UK Data missed expectations, was worth a 9 ticks move in Bund, the rest of the session is fairly light, French CPI will be final reading, and for North America, Canadian Employment is a market mover, but not for Bund.
- SUPPLY: Italy 2029, 2035 (equates combined to 36.8k BTP) will weigh.
- SPEAKERS: ECB Panetta, Vujcic, Cipollone, Fed Goolsbee.
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BTP TECHS: (U5) Trend Needle Points North
Jun-11 06:14
- RES 4: 122.35 2.500 proj of the May 14 - 20 - 21 price swing
- RES 3: 122.00 Round number resistance
- RES 2: 121.65 2.000 proj of the May 14 - 20 - 21 price swing
- RES 1: 121.37 High Jun 9
- PRICE: 121.19 @ Close Jun 10
- SUP 1: 120.24 20-day EMA
- SUP 2: 119.48 Low May 26
- SUP 3: 118.87 Low May 21
- SUP 4: 118.51 Low May 14 and key support
A bullish condition in BTP futures remains intact and Monday’s fresh cycle high reinforces current conditions. Resistance and a bull trigger at 119.70, the Apr 24 high, has been cleared. This confirms a resumption of the uptrend and opens 121.65 next, a Fibonacci projection. Key support to watch lies at 118.51, the May 14 low. A clear break of this level would highlight a reversal. First support lies at 120.24 the 20-day EMA.
BOE: Saporta speech on monetary policy implementation due 7:30BST
Jun-11 06:13
- The text of BOE ED of Markets Saporta’s speech will be published this morning at 7:30BST here and will cover monetary policy implementation.
- As the TFLS and gilt portfolio continues to be wound down, demand for reserves has been stable around GBP700bln for around 3-months now despite some large gilt redemptions (including a large one over the past few days). Usage of the STR has continued to increase, and will continue to be watched in coming weeks ahead of the BOE’s decision on how much to wind down the APF over the October 2025 to September 2026 period (which will likely be made at the September MPC meeting).
- The latest estimate in the April BOE Market Participants Survey was that the APF would be reduced in sized by GBP75bln (which would see active sales pick up versus this year but a smaller total reduction than this year’s GBP100bln).
- We will be looking for any steer ahead of that and will also be looking to see whether Saporta sticks to the BOE’s central view that the Preferred Minimum Reserve Range (PMRR) is between GBP345-490bln (or GBP385-530bln as Mann said in a recent speech).
US TSY OPTIONS: TYN5 112.00 Calls Blocked
Jun-11 06:13
Latest block trade blocked at 06:44:02 London/01:44:02 NY:
- TYN5 112.00 calls 8K blocked at 0-02, looks like a buyer, with another ~4.2K trading on screen on the follow.
