BOBL TECHS: (U5) Support Remains Intact For Now
- RES 4: 118.649 1.382 proj of the May 21 - Jun 3 - Jun 5 price swing
- RES 3: 118.531 1.236 proj of the May 21 - Jun 3 - Jun 5 price 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: 117.770 @ 05:50 BST Jun 18
- 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 remain in a bull cycle, however, the contract continues to trade below its Jun 13 high. The latest pullback has exposed key short-term support at 117.530, the Jun 5 low. A break of this level would highlight a stronger reversal and cancel the recent 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. Clearance of this level would be bullish.
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LOOK AHEAD: Eurozone Timeline of Key Events (Times BST)
| Date | Time | Country | Event |
| 20-May | 0700 | DE | PPI |
| 20-May | 0900 | EU | EZ Current Account |
| 20-May | 1000 | EU | Construction Production |
| 20-May | 1100 | EU | ECB's Cipollone pre-rec video On Sustainability |
| 20-May | --- | EU | ECB's Lagarde and Cipollone at G7 Meeting |
| 20-May | 1500 | EU | Consumer Confidence Indicator (p) |
| 21-May | 1700 | EU | ECB's Lane at Monpol Panel Discussion |
| 22-May | 0745 | FR | Manufacturing Sentiment |
| 22-May | 0815 | FR | S&P Global Flash PMI (p) |
| 22-May | 0830 | DE | S&P Global Flash PMI (p) |
| 22-May | 0900 | DE | IFO Business Climate Index |
| 22-May | 0900 | EU | S&P Global Flash PMI (p) |
| 22-May | 1230 | EU | ECB April Minutes Released |
| 22-May | 1400 | BE | BNB Business Confidence |
| 22-May | 1600 | EU | ECB's Elderson Dinner Speech at Biodiversity Day |
| 22-May | 1635 | EU | ECB's de Guindos Speech in Madrid |
GBPUSD TECHS: Bullish Outlook
- RES 4: 1.3550 High Feb 24 ‘22
- RES 3: 1.3510 1.236 proj of the Feb 28 - Apr 3 - 7 price swing
- RES 2: 1.3444 High Apr 28 / 29 and the bull trigger
- RES 1: 1.3404 High May 19
- PRICE: 1.3373 @ 06:14 BST May 20
- SUP 1: 1.3140 Low May 12
- SUP 2: 1.3126 50-day EMA
- SUP 3: 1.3041 Low Apr 14
- SUP 4: 1.2968 Low Apr 11
GBPUSD traded higher Monday, extending the recovery from 1.3140, the May 12 low. A bullish engulfing candle on May 13 highlights a bullish reversal signal. The pattern remains valid and if correct, signals the end of the recent corrective cycle and a resumption of the uptrend. Key support to watch is 1.3126, the 50-day EMA. A continuation higher would refocus attention on the key resistance and a bull trigger, at 1.3444, the Apr 28 / 29 high.
JGBS: Very Poor 20Y Auction Sparks Sharp Bear-Steepener
JGB futures are sharply weaker, -24 compared to settlement levels, but well above session cheaps seen in the aftermath of today’s very poor 20-year auction.
- The low-price underperformed dealer forecasts, according to a Bloomberg poll. Moreover, the cover ratio decreased to 2.5007x from 2.9639x in the previous auction, and the auction tail lengthened dramatically from 0.34 to 1.14 – the longest since 1987. In post-auction dealing, the 20-year JGB hascheapened 13bps.
- Cash US tsys are slightly cheaper in today’s Asia-Pac session after yesterday’s modest gains.
- (Bloomberg) -- “House Speaker Mike Johnson said “we are almost there” on passing a sweeping US tax bill. Republicans are pushing to implement Medicaid work requirements in 2027, two years earlier than planned, Majority Leader Steve Scalise told CNBC.”
- (Bloomberg) - “Washington lawmakers are risking a "fiscal disaster" if a recession hits as they continue with their package of sweeping tax cuts, according to Guggenheim Securities Co-Chair Jim Millstein.”
- Cash JGBs have bear-steepened across benchmarks, with yields 1-13bps higher. The benchmark 20-year yield is 13bps higher at 2.543%.
- Swaps have also bear-steepened, with rates 1-11bps higher.
- Tomorrow, the local calendar will see Trade Balance data.
