US 10YR FUTURE TECHS: (U5) Bear Threat Remains Present
- RES 4: 112-04+ High May 2
- RES 3: 111-25 High May 7
- RES 2: 111-05+ High May 9
- RES 1: 110-23/25 High May 16 and a key resistance / Intraday high
- PRICE: 110-22 @ 11:16 BST May 30
- SUP 1: 109-26/12+ Low May 29 / 22 and the bear trigger
- SUP 2: 109-09+ Low Apr 11 and key support
- SUP 3: 109-00 Round number support
- SUP 4: 108-25+ 0.764 proj of the Apr 7 - 11 - May 1 price swing
A bear cycle in Treasury futures remains in play for now, and recent short-term gains are considered corrective. However, the contract is testing resistance 110-23, the May 16 high. A clear break of this level would undermine a bearish theme and highlight a stronger reversal, exposing 111-05+, the May 9 high. A reversal lower would refocus attention on the key support and bear trigger at 109-12+.
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STIR: Long Setting Seen Further Out The SOFR Strip On Tuesday
OI data points to a mix of net long setting and short cover during Tuesday’s uptick in SOFR futures, with the most meaningful positioning adjustment seemingly coming via net long setting across the greens and blues (only modest net short cover in SFRH8 broke the wider theme in those 2 packs).
| 29-Apr-25 | 28-Apr-25 | Daily OI Change |
| Daily OI Change In Packs |
SFRH5 | 1,103,977 | 1,102,450 | +1,527 | Whites | -13,375 |
SFRM5 | 1,269,822 | 1,270,258 | -436 | Reds | -14,350 |
SFRU5 | 981,404 | 990,585 | -9,181 | Greens | +41,686 |
SFRZ5 | 1,099,641 | 1,104,926 | -5,285 | Blues | +5,189 |
SFRH6 | 723,289 | 725,138 | -1,849 |
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SFRM6 | 689,143 | 703,967 | -14,824 |
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SFRU6 | 692,978 | 692,368 | +610 |
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SFRZ6 | 846,220 | 844,507 | +1,713 |
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SFRH7 | 625,220 | 614,938 | +10,282 |
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SFRM7 | 545,070 | 532,413 | +12,657 |
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SFRU7 | 359,039 | 355,449 | +3,590 |
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SFRZ7 | 397,852 | 382,695 | +15,157 |
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SFRH8 | 267,903 | 270,878 | -2,975 |
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SFRM8 | 188,797 | 185,924 | +2,873 |
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SFRU8 | 150,450 | 147,204 | +3,246 |
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SFRZ8 | 165,858 | 163,813 | +2,045 |
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US TSY FUTURES: Mix Of Long Setting & Short Cover Seen Tuesday
OI data points to a mix of net long setting (FV, UXY & US) and short cover (TU, TY & WN) during yesterday’s rally.
- The positioning swings largely offset in curve-wide terms, leaving a modest bias towards net long setting.
| 29-Apr-25 | 28-Apr-25 | Daily OI Change | OI DV01 Equivalent Change ($) |
TU | 4,080,854 | 4,092,993 | -12,139 | -451,459 |
FV | 6,832,963 | 6,827,138 | +5,825 | +252,299 |
TY | 4,863,710 | 4,866,159 | -2,449 | -157,588 |
UXY | 2,284,980 | 2,271,750 | +13,230 | +1,182,868 |
US | 1,799,444 | 1,789,402 | +10,042 | +1,310,072 |
WN | 1,879,911 | 1,887,856 | -7,945 | -1,520,799 |
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| Total | +6,564 | +615,394 |
FOREX: USDJPY Drifts Back Above 143.00 as US Data/BOJ Awaited
- Lower US yields this week prompted a resumption of USDJPY weakness, exacerbated by the bearish technical conditions and 144.00 capping the recovery well. Weaker-than-expected US data on Tuesday saw USDJPY test 142.00 a couple of times before potential month end related flows, position squaring ahead of US GDP and stability for global equities have proved supportive.
- Weaker-than-expected IP and retail sales data from Japan may also be providing a USDJPY tailwind, as the pair has been steadily grinding higher across the APAC session and through the European morning. 20-day EMA resistance has moved down, coinciding with last week’s highs around the 144.00 mark. Support is seen at 141.97 and 141.49, the Apr 23 low.
- US GDP & ECI, MNI Chicago PMI and PCE will provide the primary impulse for USDJPY Wednesday, however, the close proximity to month-end and Thursday’s BOJ decision may provide obstacles to a meaningful breakout.
- Given the significant shifts in external conditions, particularly the U.S. tariff policy changes since the last MPM in March, the BoJ is likely to adopt a cautious, wait-and-see stance at this meeting. Our full preview with analyst views is here: https://mni.marketnews.com/42YfUk9
