BUND TECHS: (U5) Potential Reversal

• RES 4: 118.649 1.382 proj of the May 21 - Jun 3 - Jun 5 swing
• RES 3: 118.531 1.236 proj of the May 21 - Jun 3 - Jun 5 swing
• RES 2: 118.390 High Jun 13 and a bull trigger 
• RES 1: 118.065 61.8% retracement of the Jun 13 - 16 downleg   
• PRICE: 117.720 @ 05:48 BST Jul 2  
• SUP 1: 117.530 Low Jun 5 and a key near-term support 
• SUP 2: 117.470 Low May 21 
• SUP 3: 117.470 Low May 21
• SUP 4: 116.660 Low Mar 27       

Bobl futures are unchanged and continue to trade in a range. A bull cycle remains intact, however, the latest pullback has exposed key short-term support at 117.530, the Jun 5 low. Clearance of this level would highlight a stronger reversal and cancel the bull theme. This would open 117.470, the May 21 low. Key short-term resistance has been defined at 118.390, the Jun 13 high. A break of this price point would be a bullish development.

NZGBs closed 1-2bps cheaper after a subdued session. There were 2bp ranges across the benchmarks. 

• Cash US tsys are little changed in today's Asia-Pac session. Wednesday's US data focus is on MBA Mortgage Applications at 0700ET, Challenger Jobs at 0730ET followed by ADP Employment Change at 0815ET. No Fed scheduled Fed speakers. Thursday is a heavy data day with NFP added due to Independence Day holiday closure on Friday.
• The NZ-US yield differential closed 2bps tighter on the day. At +25bps, the NZ-US 10-year differential is in the top half of the -20bp to +40bps range seen this year. 
• Swap rates closed 1-2bps higher, with the 2s10s curve steeper.
• RBNZ dated OIS pricing closed little changed across meetings. 4bps of easing is priced for July, with a cumulative 33bps by November 2025.
• Tomorrow, the local calendar will see Cotality Home Values, ANZ Commodity Prices and NZ Government 11-Month Financial Statements.
• The NZ Treasury launched a syndicated tap of the May 2031 nominal bond. Treasury expects to issue at least NZ$4bn and will cap it at NZ$6bn. Issue will be priced July 3 with initial price guidance +21-24 bps over the May 2030 nominal bond. The Treasury has cancelled the July 3 bond auction.

• RES 4: 1.1923 2.000 proj of the Feb 28 - Mar 18 - 27 price swing
• RES 3: 1.1868 2.0% 10-dma envelope
• RES 2: 1.1851 High Sep 10 2021 
• RES 1: 1.1829 High Jul 01
• PRICE: 1.1796 @ 05:56 BST Jul 2
• SUP 1: 1.1631 High Jun 12 and a recent breakout level
• SUP 2: 1.1578 20-day EMA
• SUP 3: 1.1446 Low Jun 19  
• SUP 4: 1.1405 50-day EMA

The trend needle in EURUSD continues to point north and the pair is holding on to its latest gains. The breach last week of 1.1631, the Jun 12 high and a bull trigger, confirmed a resumption of the uptrend. The 1.1800 handle has been pierced, sights are on 1.1851, the Sep 10 2021 high. Key short-term support to watch lies at 1.1578, the 20-day EMA. A clear break of this average is required to signal scope for a deeper retracement.