BOBL TECHS: (U5) Gains Considered Corrective

• US and Chinese officials are meeting Monday to extend their tariff detente beyond a mid-August deadline, and haggle over other ways to further defuse trade tensions.  Chinese Vice Premier He Lifeng and US Treasury Secretary Scott Bessent will lead the delegations through Tuesday in Stockholm — their third meeting in less than three months. The agenda includes discussions about how long the current tariff truce can be extended, as well as US levies tied to fentanyl trafficking and Chinese purchases of sanctioned Russian and Iranian oil.   (source BBG)
• Over the weekend, the release of China's Industrial Profits for the year provided limited positive news for the current state for China's corporates.
• Industrial profits year-on-year declined -4.3% in June, following the decline of -9.1% in May.  The year-to-date number declined further to -1.8% YoY from -1.1% in May.  Intensive competition between companies has exacerbated deflationary pressures at a time when exports to the US remain pressurized. The auto sector particularly is seeing increased competition as EV manufacturers vie for sales. State-owned automakers Guangzhou Automobile Group and JAC Group have posted losses driven by the intense pricing pressure in the auto sector.  The data showed the gap widening between state owned enterprises and private companies. State-owned firms recorded a 7.6% decline in profits in the first half. Private-sector companies reported a rise of 1.7% while foreign firms logged a 2.5% increase.  China's authorities have stated this month that efforts to regulate aggressive price-cutting will be forthcoming, fueling expectations that a fresh round of industrial capacity cuts might be approaching.  (source MNI)
• In Hong Kong, markets are modestly higher, the HSI up around 0.4%, while the CSI 300 is down a touch in China. Over the weekend we saw profit results remain negative in y/y terms for June, albeit up from the May decline.
• Yuan Reference Rate at 7.1467 Per USD; Estimate 7.1686
• Bonds are firmer today with the CGB 10yr at 

• RES 4: 1.1923 2.000 proj of the Feb 28 - Mar 18 - 27 price swing
• RES 3: 1.1917 2.0% 10-dma envelope
• RES 2: 1.1851 High Sep 10 2021 
• RES 1: 1.1790/1829 High Jul 7 / 01 and the bull trigger 
• PRICE: 1.1747 @ 06:08 BST Jul 28
• SUP 1: 1.1684 20-day EMA
• SUP 2: 1.1559/57 50-day EMA / Low Jul 17
• SUP 3: 1.1446 Low Jun 19
• SUP 4: 1.1405 Low Jun 11  

EURUSD continues to hold on to the bulk of its latest gains and a bullish theme remains intact. A pullback between Jul 1 - 17 appears to have been a correction. Support to watch lies at the 50-day EMA, at 1.1559. A clear break of this average is required to signal a stronger reversal. Note that trend indicators continue to highlight a dominant medium-term uptrend. Sights are on 1.1829, the Jul 1 high and the bull trigger.

Oil prices are moderately higher during today’s APAC session after falling over a percent on Friday as another trade deal with the US has helped to alleviate concerns that increased protectionism would weigh on global energy demand. WTI is up 0.6% to $65.57/bbl after a low of $65.05. Brent is 0.6% higher at $68.85/bbl off today’s peak of $68.88. The USD index is little changed.

• The EU reached an agreement with the US for tariffs of 15% except steel & aluminium which still face 50% and aircraft & parts that will have no duty. The EU agreed to buy $750bn of US energy over the remainder of President Trump’s term and invest $600bn in the US.
• The oil market will be watching the outcome of US-China talks starting today and Sunday’s OPEC meeting closely as well as the tone from Wednesday’s Fed decision (it is widely expected to keep rates unchanged). Key data this week include US Q2 GDP & June PCE July 30 & 31, and US July payrolls August 1.
• OPEC is meeting today to determine where the oil market is at before the August 3 output decision. It is expected to increase targets again after 411kbd was decided in July for August.
• There are few other events today with only the July Dallas Fed manufacturing, which can impact oil price movements, and the ECB survey of monetary analysts released.