US TSYS: Tsys Futures Slightly Higher, Ranges Narrow Ahead Of Data
- Tsys futures are slightly off session highs, however ranges have been narrow. TU +01⅜ at 103-04⅞, while TY is +06+ at 110-30+ with initial resistance at 111-14 (Oct 25 high)
- There was an earlier block buy of UXY, DV01 $405k, and a large TY 113 call, x30,000, delta 21%
- Overall, Investors remain bearish ahead of the US presidential election, betting on further bond losses and increased volatility. Yields have already surged, with options traders targeting a potential 4.5% yield on the 10-year note. Elevated open interest in 10yr December 109.5 put options reflects hedging against a deeper bond selloff.
- Overnight In tsys options there was demand during US morning for volatility hedging, with stand-out flows including a $5m premium strangle position via TY Week 1 options. The BofA move Index has now reached it's highest in 12 month, as traders expected volatility to increase heading into the election.
- Cash tsys yields are flat to 1bps lower today, with the curve slightly flatter. The 2yr is -0.4bps at 4.092%, while the 10yr is -0.8bps at 4.246%.
- Focus turns to ADP employment data, GDP and Pending Home Sales.
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BOBL TECHS: (Z4) Resistance Remains Intact
- RES 4: 120.905 1.50 retracement proj of the Aug 5 - Sep 3 bear leg
- RES 3: 120.722 1.382 retracement proj of the Aug 5 - Sep 3 bear leg
- RES 2: 120.496 1.236 retracement proj of the Aug 5 - Sep 3 bear leg
- RES 1: 120.230 High Sep 11 and the bull trigger
- PRICE: 120.040 @ 05:28 BST Sep 30
- SUP 1: 119.634/340 20-day EMA / Low Sep 20
- SUP 2: 119.210 61.8% retracement of the Sep 3 - 11 rally
- SUP 3: 119.030 Low Sep 4
- SUP 4: 118.580 Low Sep 3 and key support
The trend condition in Bobl futures remains bullish however, a short-term corrective cycle is potentially still in play for now. Recent weakness has resulted in a print below the 20-day EMA and this signals scope for a deeper retracement. The next support to watch is 119.210, a Fibonacci retracement. The contract has recovered from its latest lows. The key resistance and bull trigger is at 120.230, the Sep 11 high.
EURUSD TECHS: Trend Needle Points North
- RES 4: 1.1409 2.236 proj of the Jun 26 - Jul 17 - Aug 1 price swing
- RES 3: 1.1342 2.00 proj of the Jun 26 - Jul 17 - Aug 1 price swing
- RES 2: 1.1276 High Jul 18 2023
- RES 1: 1.1214/34 High Sep 25 / 1.618 proj Jun 26-Jul 17-Aug 1 swing
- PRICE: 1.1161 @ 05:43 BST Sep 30
- SUP 1: 1.1114/1040 20-day EMA / 50-day EMA
- SUP 2: 1.1002 Low Sep 11
- SUP 3: 1.0940 61.8% retracement of the Aug 1 - 26 bull leg
- SUP 4: 1.0878 76.4% retracement of the Aug 1 - 26 bull leg
The short-term outlook in EURUSD remains bullish and the pair is trading closer to its recent highs. 1.1202, the Aug 26 high and a bull trigger, has been pierced. A clear break of this hurdle would confirm a resumption of the uptrend and pave the way for a move towards 1.1234, a Fibonacci projection and 1.1276, the Jul 18 '23 high. Support to watch is the 20-day EMA, at 1.1114, it has been pierced but remains intact.
