SCHATZ TECHS: (U5) Support Remains Exposed

• RES 4: 107.690 High Apr 30 
• RES 3: 107.610 High May 23 and a key near-term resistance
• RES 2: 107.430/475 High Jun 13 / High May 27
• RES 1: 107.327 20-day EMA 
• PRICE: 107.255 @ 06:09 BST Jun 17
• SUP 1: 107.195/185 Low Jun 6 / 16    
• SUP 2: 107.125 Low May 12 and a key support
• SUP 3: 107.000 Round number support 
• SUP 4: 106.890 2.000 proj of the May 23 - 29 - 30 price swing

Schatz futures faced strong resistance Friday, resulting in a pullback from the session high. Support to watch lies at 107.195, the Jun 6 low. It has been pierced, a clear break of this level would reinstate a bearish threat and signal scope for an extension towards 107.125, the May 12 low. On the upside, a breach of 107.470, the May 30 high, is required to strengthen a bullish condition. First key resistance is 107.430, the Jun 13 high.

• China's economy continued to expand steadily in May, supported by ongoing policy measures that helped sustain recovery amid global uncertainties, official data showed on Monday.
• Key economic indicators -- industrial production, retail sales, investment and services -- extended gains last month, while employment continued its stable trend, according to the National Bureau of Statistics (NBS).  (source XINHUA)
• China's cross-border e-commerce sector achieved a historic milestone in 2024, with annual exports surpassing 2 trillion yuan (about 278.59 billion U.S. dollars) for the first time, according to data from the General Administration of Customs (GAC).  The sector's exports grew 16.9 percent year on year to reach 2.15 trillion yuan in 2024, while total cross-border trade volume hit 2.71 trillion yuan.  (source XINHUA)
• The Hang Seng drifted marginally lower by -0.13% and remains down by -0.55% over the last five trading days. The CSI 300 followed, down -0.15%, the Shanghai Composite down -0.19% and the Shenzhen Composite is down a mere --0.04% and is barely positive over the last five trading days.
• Yuan Reference Rate at 7.1746 Per USD; Estimate 7.1819
• CGBs are little changed today with the 10Yr at 1.69%

JGB futures have weakened to session lows, -38 compared to settlement levels, following the BoJ Policy Decision.

• The BoJ kept rates at 0.50%, as widely expected. That decision from the central bank board was unanimous. The bond buying program is unchanged through to the end of March 2026. The central bank did announce that it would trim bond buying by 200bn/per quarter from April 2026 next year. The current pace had been at a reduction of 400bn per quarter. There was one dissenter to this decision, board member Tamura, who wanted to keep the pace around 400bn. He also argued that long term rates should be determined by the market.
• The BoJ emphasised that tapering will proceed in a predictable and cautious manner, but left the door open to adjustments if market conditions require.
• The BoJ views price trends as broadly in line with its 2% inflation target in the second half of its outlook period.
• Cash JGBs are 1-4bps cheaper across benchmarks, with the 7-10-year underperforming. The benchmark 10-year yield is 4.4bps higher at 1.482% versus the cycle high of 1.596%.
• The swaps curve has bear-steepened, with rates are 2-5bps higher. Swap spreads are mostly wider.
• Tomorrow, the local calendar will see Trade Balance and Core Machine Orders data.