US TSYS: Treasury Yields Give Back Some of Overnight Gains
US treasury futures are all up marginally today whilst heading for a weekly gain. The US 10-Yr is at 113-00 today looking at reasonable gains for the week having closed off last Friday at 112-17. TYZ5 is back above all major moving averages, having dipped below for 10 trading days as investors views on potential rate cuts in December whipsaw around.
Cash is weaker today with yields up to +1bps higher in the front end, giving back overnight gains.
- The 2-Yr is up +1.3bps to 3.548% - lower by -6bps for the week.
- The 5-Yr is up +1.0bps at 3.658% - lower by -8bps for the week
- The 10-Yr is up +0.8bps at 4.094% - lower by -5bps for the week.
- The 30-Yr is up +0.1bps at 4.726% - lower by -2bps for the week.
Whilst the flow of government provided data continues tonight with housing starts, building permits and new home sales the reality is that markets are deeming these releases as stale. The November preliminary PMIs however should receive more focus alongside the University of Michigan inflation and sentiment indicators. There are no major auctions scheduled at this stage with bills and 2-Yr notes the focus.
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EURUSD TECHS: Support Intact For Now
- RES 4: 1.1919 High Sep 17 and a bull trigger
- RES 3: 1.1820 High Sep 23
- RES 2: 1.1775 61.8% retracement of the Sep 17 - Oct 9 bear leg
- RES 1: 1.1730 50.0% retracement of the Sep 17 - Oct 9 bear leg
- PRICE: 1.1615 @ 06:28 BST Oct 22
- SUP 1: 1.1542 Low Oct 9 and the bear trigger
- SUP 2: 1.1516 76.4% retracement of the Aug 1 - Sep 17 bull leg
- SUP 3: 1.1392 Low Aug 1 and bear trigger
- SUP 4: 1.1313 Low May 30
EURUSD is trading above 1.1542, the Oct 9 low. Recent gains signal a potential reversal, suggesting the corrective phase between Sep 17 - Oct 9, may be over. Note that moving average studies are in a bull-mode position - for now - highlighting a dominant M/T uptrend. A resumption of gains would open 1.1775 next, a Fibonacci retracement. Key support and the bear trigger lies at 1.1542, the Oct 9 low. Clearance of this level reinstates a bear theme.
BOBL TECHS: (Z5) Bull Cycle Intact
- RES 4: 119.780 High Apr 22 (cont)
- RES 3: 119.600 High May 7 (cont)
- RES 2: 119.250 76.4% of the Apr 7 - Aug 15 bear leg (cont)
- RES 1: 118.970/119.000 High Oct 17 / Round number resistance
- PRICE: 118.640 @ 06:08 BST Oct 22
- SUP 1: 118.450 Low Oct 15
- SUP 2: 118.246 20-day EMA
- SUP 3: 117.880 Low Oct 9
- SUP 4: 117.710 Low Oct 6
Bobl futures continue to trade below last week’s high.Recent impulsive gains reinforces the uptrend that started Sep 25. Sights are on the 119.00 handle next. A break of this level would open 119.25, a Fibonacci retracement point. Note that the contract is in overbought territory, a pullback would allow this condition to unwind. Initial key support is at the 20-day EMA, at 118.246. A clear break of the 20-day EMA would undermine the bullish theme.
LOOK AHEAD: UK Timeline of Key Events (Times BST)
| Date | Time | Period | Event |
| 22-Oct | 0700 | Sep | Consumer inflation report / Producer Prices |
| 23-Oct | 1100 | Oct | CBI Industrial Trends |
| 24-Oct | 0001 | Oct | Gfk Monthly Consumer Confidence |
| 24-Oct | 0700 | Sep | Retail Sales |
| 24-Oct | 0930 | Oct | S&P Manuf / Services / Composite PMI (p) |
| 27-Oct | 1100 | Oct | CBI Distributive Trades |
| 28-Oct | 0001 | Oct | BRC Monthly Shop Price Index |
| 29-Oct | 0001 | Sep | Brightmine pay deals for whole economy |
| 29-Oct | 0930 | Sep | BOE Lending to Individuals / M4 |
| 31-Oct | 0930 | --- | ONS Blue Book / Pink Book |
| 03-Nov | 0930 | Oct | S&P Global Manufacturing PMI (Final) |
| 05-Nov | 0930 | Oct | S&P Global Services / Composite PMI (Final) |
| 06-Nov | 0930 | Oct | S&P Global/CIPS Construction PMI |
| 06-Nov | 1200 | --- | Bank Of England Interest Rate |
| 06-Nov | 1400 | Oct | Decision Maker Panel Data |
| 11-Nov | 0001 | Oct | BRC-KPMG Shop Sales Monitor |
| 11-Nov | 0700 | Sep/Oct | Labour Market Report |
| 13-Nov | 0700 | Sep/Q3 | GDP / Services / Production / Trade / Construction |
