US 10YR FUTURE TECHS: (U5) Holds Ground

• US Data/Speaker Calendar (prior, estimate)
• 07/09 0700 MBA Mortgage Applications reported 9.4% from 2.7% prior
• 07/09 1000 Wholesale Trade Sales MoM (0.1%, 0.2%)
• 07/09 1000 Wholesale Inventories MoM (-0.3%, -0.3%)
• 07/09 1130 US Tsy $65B 17W bill auction
• 07/09 1300 US Tsy $39B 10Y note auction R/O (91282CNC1)
• 07/09 1400 FOMC Meeting Minutes for June
• Source: Bloomberg Finance L.P. / MNI

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• In the FI space, Bund futures traded lower Tuesday, extending Monday’s sell-off. Support at 129.77, the Jul 3 low, has been cleared. The clear break confirms a resumption of the recent bearish theme and opens 129.30 next, the May 22 low. On the upside, resistance around the the 50-day EMA, at 130.47, has recently been pierced but for now, remains intact. A clear break of it is required to highlight a possible reversal.
• A bear cycle in Gilt futures remains in play and Tuesday’s sell-off reinforces this theme. The contract has breached support at 91.63, the Jul 2 low. Price has also pierced 91.50, the 61.8% retracement of the May 22 - Jul 1 bull leg. This exposes 90.97, the 76.4% retracement point. Clearance of this level would strengthen a bearish theme. On the upside, initial firm resistance is at 92.51, the 20-day EMA.