ENERGY: Trump Priority Preventing Iranian Nuclear Weapon: White House

Surge in Tsy quarterly futures roll volumes from June'25 to September'25 outlined below. Aside from the 5Y at 13%, percentage complete is still only 5%-10% across the curve ahead the "First Notice" date on May 30. Current roll details:

• TUM5/TUU5 appr 110,900 from -9.0 to -8.5, -8.88 last, appr 7% complete
• FVM5/FVU5 appr 303,400 from -3.75 to -3.25, -3.75 last, appr 13% complete
• TYM5/TYU5 appr 319,900 from -1.75 to -0.75, -1.5 last, appr 9% complete
• UXYM5/UXYU5 appr 42,700 from 3.25 to 4.0, 3.75 last, appr 3% complete
• USM5/USU5 appr 61,000 from 10.0 to 10.75, 10.25 last, appr 6% complete
• WNM5/WNU5 appr 23,900 from 6.0 to 7.0, 6.25 last, appr 5% complete
• Reminder, June futures won't expire until next month: 10s, 30s and Ultras on June 18, 2s and 5s on June 30. June Tsy options, however, expire May 23.

• RES 4: 1.3550 High Feb 24 ‘22
• RES 3: 1.3510 1.236 proj of the Feb 28 - Apr 3 - 7 price swing
• RES 2: 1.3444 High Apr 28 / 29 and the bull trigger
• RES 1: 1.3404 High May 19   
• PRICE: 1.3365 @ 16:36 BST May 20
• SUP 1: 1.3140 Low May 12   
• SUP 2: 1.3126 50-day EMA
• SUP 3: 1.3041 Low Apr 14  
• SUP 4: 1.2968 Low Apr 11 

GBPUSD traded higher Monday, extending the recovery from 1.3140, the May 12 low. A bullish engulfing candle on May 13 highlights a reversal signal. The pattern remains valid and if correct, signals the end of the recent corrective cycle and a resumption of the uptrend. Key support to watch is 1.3126, the 50-day EMA. A continuation higher would refocus attention on the key resistance and a bull trigger, at 1.3444, the Apr 28 / 29 high. 

The Dallas Fed banking conditions survey showed slight loan volume growth while loan demand was unchanged in May. The net 8% reported tighter lending standards over the past six weeks followed 14% in April and was its lowest since early 2022.

• The survey was collected May 6-14, and so could have started to capture the impact from a de-escalation in US-China trade policies on May 12 along with a better reflection of policies under reciprocal tariffs after the prior survey was conducted Mar 24-Apr 2. Of course, broader banking regulation and tax policy are likely as much if not more impactful here.
• Interestingly, the net share reporting higher NPLs over the past six weeks improved markedly from the last survey, with just 2.8% vs 19.4% in the April survey for its lowest since late 2022.
• Future NPL expectations over the next six weeks didn’t see the same improvement however, dropping from 22.3% to 18.1%.
• That chimes with the rest of the summary in the press release: “Nevertheless, bankers reported a continued contraction in general business activity. Bankers are less optimistic about the outlook. On net, survey respondents still expect an improvement in loan demand and business activity six months from now, but that sentiment is less broad based than in previous months, and loan nonperformance is expected to increase.”