FED: US TSY TO SELL $86.000 BLN 13W BILL NOV 10, SETTLE NOV 13

• US TSY 3Y NOTE AUCTION: HIGH YLD 3.576%; ALLOTMENT 60.65%
• US TSY 3Y NOTE AUCTION: DEALERS TAKE 10.72% OF COMPETITIVES
• US TSY 3Y NOTE AUCTION: DIRECTS TAKE 26.58% OF COMPETITIVES
• US TSY 3Y NOTE AUCTION: INDIRECTS TAKE 62.70% OF COMPETITIVES
• US TSY 3Y AUCTION: BID/CVR 2.66

• RES 4: 1.2063 2.236 proj of the Feb 28 - Mar 18 - 247 price swing
• RES 3: 1.2000 Round number resistance 
• RES 2: 1.1919 High Sep 17 and a bull trigger
• RES 1: 1.1779/1820 High Oct 1 / High Sep 23  
• PRICE: 1.1672 @ 16:36 BST Oct 7
• SUP 1: 1.1690/46 50-day EMA / Low Sep 25 
• SUP 2: 1.1574 Low Aug 27
• SUP 3: 1.1528 Low Aug 5
• SUP 4: 1.1392 Low Aug 1 and bear trigger.

The primary trend direction in EURUSD is up and recent weakness appears corrective. Support to watch is 1.1690, the 50-day EMA. It has been pierced, raising focus on the level at the Tuesday close. A clear break of the EMA is required to signal scope for a deeper retracement and expose 1.1574, the Aug 27 low. For bulls, a clear resumption of gains would open 1.1919, the Sep 7 high and bull trigger. Note that MA studies are in a bull-mode position highlighting a dominant medium-term uptrend.       

The fiscal projection of the German "Stability Council" finds that "the Maastricht debt ratio could rise to around 80.25% of GDP by the end of the projection period in 2029" in Germany. This compares with a realised debt ratio of 62.5% of GDP in 2024. 

• It is difficult to gain a firm view on current consensus on the German Maastricht debt ratio for the years ahead, but 80%+ seems to be towards the higher end of estimates we've seen previously.
• "The members of the Stability Council agreed that such a dynamic development of debt levels relative to economic performance, if it continued, would jeopardise the long-term sustainability of public finances. In order to counteract such a development, the Stability Council therefore considers consistent consolidation measures at all levels of government, comprehensive structural reforms and the investment- and growth-enhancing use of funds from the Special Fund for Infrastructure and Climate Neutrality to be urgently necessary."
• The Stability Council is a joint body of the German federal government and the states, and is enacted to strengthen "institutional conditions for ensuring long-term sustainable budgets at federal and state level".

In addition, the council notes: "By 2026, the general government deficit ratio could rise to 4¾% of gross domestic product (GDP) before falling again and reaching 3¾% of GDP in 2029. Taking into account the NEC, even with an assumed extension for 2029, the deficit ratio is likely to remain within the maximum permissible level of 3% of GDP, with the exception of 2026 and 2027. Exceeding this level in later years could have a negative impact on compliance with European fiscal rules."

Full press release here (in German).