COMMODITIES: WTI Futures Holding Onto the Bulk of This Week’s Gains
WTI futures are holding on to this week’s gains. The climb marks an extension of the current corrective cycle. $69.41, the 50.0% retracement of the Jun 23-24 downleg, has been cleared. A continuation higher would open $70.96 next, the 61.8% retracement point. On the downside, support to watch is the 50-day EMA, at $65.37. The average has been pierced, a clear break of it would expose $58.17, the May 30 low. Gold has pulled back from its Jul 23 high. Short-term weakness is considered corrective - for now - and a bull cycle that started Jun 30 remains intact. However, the yellow metal has traded through support at $3319.9, the 50-day EMA. A clear break of this level signals scope for a deeper retracement and exposes the next key support at $3248.7, the Jun 30 low. Key near-term resistance is $3439.0, the Jul 23 high. A break of this hurdle would be bullish.
- WTI Crude down $0.36 or -0.52% at $68.91
- Natural Gas down $0.01 or -0.19% at $3.1
- Gold spot up $4.53 or +0.14% at $3294.09
- Copper up $2.7 or +0.62% at $438.1
- Silver down $0.28 or -0.76% at $36.4326
- Platinum down $25 or -1.93% at $1267.13
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MNI: EUROZONE MAY UNEMPLOYMENT RATE 6.3%
- MNI: EUROZONE MAY UNEMPLOYMENT RATE 6.3%
EUROZONE DATA: Unemployment Rate Ticks Up To 6.3%
The Eurozone unemployment rate unexpectedly ticked up to 6.3% in May but remains close to the 6.2% cycle lows seen in April (consensus was for an unchanged print).
GERMAN AUCTION PREVIEW: 2.60% Aug-35 Bund
This morning, Germany will open its new on-the-run 10-year 2.60% Aug-35 Bund (ISIN: DE000BU2Z056) for E6bln.
- The size of this auction was increased by E1bln from E5bln in the Q3 calendar update. The E6bln auction size is the largest for a non-Schatz German auction since 2011 (and the largest of any German auction since September 2023). This is also the only E6bln German auction scheduled for Q3.
- Demand metrics in German auctions have recovered recently after a phase of weakness towards the beginning of Q2, and that also applies to the 10-year segment. At the last June 11 auction of the (previous on-the-run) 2.50% Feb-35 Bund, the bid-to cover came in at 2.69x and the bid-to-offer at 2.09x - a significant improvement from the 1.38x bid-to-cover / 1.06x bid-to-offer seen at a weak auction in late April. These metrics compare to a 1.38x - 2.84x range for bid-to-covers and a 1.06x - 2.17x range for bid-to-offers seen in German 10y auctions this year.
- At the last two 10y auctions (Jun 11, May 21), the secondary market mid-price has also been below the lowest accepted price again - contrary to the two 10y auctions ahead of that.
- Germany last week announced its 2025 budget details and 2026-29 broad financial plans, with the resulting issuance ramp-up, on balance, being perceived as quicker than expected by analysts previously. For our view on the events, see here.
- The next German auction will be E5bln of the new Oct-30 Bobl (ISIN: DE000BU25059) on June 8, while the 2.60% Aug-35 Bund will be re-opened on July 23, also for E5bln.
- Timing: Results will be available shortly after the bidding window closes at 10:30GMT / 11:30CET.
