BUNDS: US Governemnt is in Shutdown
- Bund is steady with {us} US Treasuries going into the European session as the US Government shuts down, and as expected Month End provided no afternoon bids Yesterday, since these were small to a non event for the EU, US, and UK.
- Given the US Debacle, now there will be plenty of Questions regarding exact timing on future Data releases, but for right now, Today's Data is at the forefront.
- For the German Bund, the Technicals are unchanged, support is still at the 128.26 gap initially. Below the latter, opens to 127.88 and 127.61.
- Resistance is still eyed at 128.82 and more importantly that 129.13 gap.
- Today's Manufacturing PMIs will be final readings for France, Germany, EU, UK and US and wouldn't expect too much of a big market movers, EU Prelim CPI is also due. But the main focus is now clearly on the US ADP and ISM Mfg Data.
- SUPPLY: UK £1.6bn 10yr Linker (won't impact Gilt), Germany €5bn Bund 10yr (equates to 42.2k Bund) should weigh into the contract into the bidding deadline.
- SPEAKERS: It's another busy day for Speakers, but since CB's message is clearly on Data dependency, don't expect too much of a new rhetoric.
- Today includes, ECB Kazimir, Kocher, Simkus, Guindos, BoE Mann, Fed Barkin, Goolsbee.
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BUNDS: A Very Busy Week ahead
- The German Bund trades lower going into the Cash Open, as expected Month End had no impact on Friday, and with August behind us, risk is tilted to the downside.
- The early standout flow is in the Schatz, but this is all related to the spread being bought at -10.5.
- The September will expire next Monday for Eurex Bonds.
- Next support in Bund is at 129.16, followed by the 2.80% in Yield.
- Resistance is at today's high, 129.50, but better is seen at 130.00 despite printing a 130.06 high on the 14th August.
- This is a very busy Week ahead, and all about the Data, Bond Traders will also look to complete their Eurex Rolls.
- Today only sees, final Mfg PMIs for France, Germany, EU, UK.
- There are no Data out of the US given that this is a US Bank Holiday (Labour Day).
BRENT TECHS: (X5) Gains Considered Corrective
- RES 4: $79.16 - 2.618 proj of the Apr 9 - 23 - May 5 price swing
- RES 3: $77.28 - 2.382 proj of the Apr 9 - 23 - May 5 price swing
- RES 2: $76.39 - High Jun 23 and a bull trigger
- RES 1: $69.06/71.93 - High Aug 4 / High Jul 30 and a key resistance
- PRICE: $67.36 @ 07:03 BST Sep 1
- SUP 1: $64.50 - Low Jun 30
- SUP 2: $60.82 - Low May 30
- SUP 3: $58.37 - Low May 5
- SUP 4: $57.81 - Low Apr 9 and a key support
Despite trading closer to their recent highs, a bear cycle in Brent futures remains intact and short’-term gains are considered corrective. Sights are on $64.50, the Jun 30 low, where a clear break would confirm a resumption of the bear leg and pave the way for an extension lower. This would open $60.82, the May 30 low. Key short-term resistance has been defined at $71.93, the Jul 30 high. Clearance of this level would cancel a bear theme.
BTP TECHS: (U5) Support Remains Intact For Now
- RES 4: 122.35 2.500 proj of the May 14 - 20 - 21 price swing
- RES 3: 122.00 Round number resistance
- RES 2: 121.73 High Jun 13 and the bull trigger
- RES 1: 121.13 High Aug 15
- PRICE: 120.25 @ Close Aug 29
- SUP 1: 119.59 Low Jul 25 and key short-term support
- SUP 2: 119.48 Low May 26
- SUP 3: 118.87 Low May 21
- SUP 4: 118.51 Low May 14 and key support
The primary trend condition in BTP futures is unchanged and the direction remains up. For now, the contract continues to trade inside a broad range and the Aug 15 sell-off signals scope for a move towards the lower end of the range. Key support to watch lies at 119.59, the Jul 25 low. A clear break of this level would highlight a range breakout and a bearish threat. Key resistance is unchanged at 121.73, the Jun 13 high.
