EURUSD TECHS: Whipsaw Price Action
Jul-16 17:00
- RES 4: 1.1949 2.0% 10-dma envelope
- RES 3: 1.1923 2.000 proj of the Feb 28 - Mar 18 - 27 price swing
- RES 2: 1.1851 High Sep 10 2021
- RES 1: 1.1750/1829 High Jul 10 / 01 and the bull trigger
- PRICE: 1.1631 @ 16:57 BST Jul 16
- SUP 1: 1.1580 1.0% 10-dma envelope
- SUP 2: 1.1563 Low Jul 16
- SUP 3: 1.1505 50-day EMA
- SUP 4: 1.1446 Low Jun 19
A corrective cycle in EURUSD remains in play, despite the sharp intraday volatility Wednesday. Support at the 20-day EMA, at 1.1655, has been cleared. This shifts the focus to the 50-day EMA, at 1.1505. A clear break of the average is required to highlight a stronger reversal. For now, the move down appears corrective and trend signals continue to highlight a dominant uptrend. A resumption of gains would open 1.1829, the Jul 1 high and a bull trigger.
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BONDS: EGBs-GILTS CASH CLOSE: Bull Steeper On Another Geopolitically Heavy Day
Jun-16 16:55
European yields fell across curves Monday in a bull steepening move.
- Yields rose early in the session, with safe havens shrugging off weekend escalation of Middle East tensions, taking more of a cue from associated higher oil prices.
- But the day's highs were hit relatively early and yields descended from there. Iran-Israel headlines dominated in a data-thin session, with bond gains notably on a WSJ report that Iran was seeking to end hostilities.
- Italian final HICP was revised lower. The Eurozone hourly labour cost index moderated in Q1, but less than initially estimated.
- Both the German and UK curves bull steepened, with Gilts outperforming.
- Periphery/semi-core EGB spreads tightened, with BTPs and OATs outperforming.
- Tuesday's calendar includes the ZEW Survey for June and Spanish labour market data, with speaking appearances by ECB's Villeroy and Centeno.
Closing Yields / 10-Yr EGB Spreads To Germany
- Germany: The 2-Yr yield is down 1.5bps at 1.841%, 5-Yr is down 1.6bps at 2.12%, 10-Yr is down 0.8bps at 2.527%, and 30-Yr is down 0.1bps at 2.986%.
- UK: The 2-Yr yield is down 3.4bps at 3.906%, 5-Yr is down 2.4bps at 4.04%, 10-Yr is down 1.7bps at 4.533%, and 30-Yr is down 0.6bps at 5.254%.
- Italian BTP spread down 2.1bps at 92.8bps / French OAT down 2bps at 70.2bps
OPTIONS: Monday Sees Buying Call Structures Versus Puts In Rates
Jun-16 16:52
Monday's Europe rates/bond options flow included:
- RXN5 127.5p, bought for 1 in 6k
- ERU5 98.12/98.25cs, bought for 4.5 in 10k.
- ERZ5 98.31/98.37cs vs 97.93p, bought the cs for -0.25 (receive) in 2k
- ERH6 98.5625/98.1875ps 1x2, sold at 11.25 down to 10.50 in 21.6k
- ERH6 98.06/98.18/98.50/98.62c condor vs 97.87p, bought the condor for half in 4k
- 0NU5 96.90/97.40cs 1x1.25 vs 96.10p, bought the cs for 0.5625 in 10k
US TSYS/SUPPLY: WI 20Y Bond Re-Open
Jun-16 16:48
- WI climbs to 4.942% from 4.932% heading into the $13B 20Y auction re-open (912810UL0) cutoff at 1300ET, 10.5bp rich to last month's stop: 5.047% high yield vs. 5.035% WI
- Treasury futures firmer/off highs (TYU5 +1 at 110-20.5), curves mildly steeper: 2s10s +1.741 at 46.649, 5s30s +1.045 at 90.105.
