US 10YR FUTURE TECHS: (Z5) Clears Resistance
- RES 4: 114-02 High Oct 17 and the bull trigger
- RES 3: 113-29 High Oct 22
- RES 2: 113-18+ High Oct 28
- RES 1: 113-14 High Nov 21
- PRICE: 113-04+ @ 16:54 GMT Nov 21
- SUP 1: 112-11/08 100-dma / Trendline drawn from the May 22 low
- SUP 2: 112-06 Low Sep 25 and a key support
- SUP 3: 111-31 Low Sep 2
- SUP 4: 111-23 50.0% retracement of the May 22 - Oct 17 bull leg
Treasuries have cleared resistance at 113-02, an area of congestion since Nov 5. The clear breach of this hurdle marks a bullish development and suggests scope for a climb towards 113-18+, the Oct 28 high. Note that the move high also cancels a recent short-term bearish theme. Key support to watch is 112-06, the Sep 25 low. Trendline support, drawn from the May 22 low, lies at 112-08.
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US TSYS/SUPPLY: WI 20Y Re-Open
Tsy futures are drifting off lows (TYZ5 currently at 113-23.5, -.5), WI dips to 4.516% from 4.522% earlier ahead of the $13B 20Y bond auction re-open (912810UN6) cutoff at 1300ET.
OPTIONS: No Slowdown In Rate Upside
Wednesday's Europe rates/bond options flow included:
- ERH6 98.12/98.25/98.50/98.62 c condor vs 98.00 puts at 3 in 8k (sold condor/ bought put)
- ERM6 98.50/98.62/98.75/98.87c condor, bought for half in 4k
- ERM6 98.25/98.4375/98.50/98.87c condor vs 97.87p, bought the condor for 1.5 in 10k
- ERZ6 98.875/99.00 call spread, paper pays 0.75 on 17k
- SFIZ5 96.25/96.40/96.50 broken c fly, bought for 4 in 9k
- SFIZ5 96.40/96.50cs, bought for 1 in 3k
- SFIF6 96.40/96.30ps 1x2, bought for 1.5 in 3k
- SFIG6 96.50/96.60/96.65/96.75c condor, bought for 1.75 in 5k
- SFIH6 96.15/96.25/96.40/96.50c condor sold down to 3.25 in 18.5k
- SFIM6 96.75/97.00/97.25c fly, bought for 3 in 4k
US TSYS/SUPPLY: Preview 20Y Bond Auction
Tsy futures remain modestly weaker (TYZ5 at 113-22, -2 vs. 113-19.5 low) ahead of the $13B 20Y bond auction re-open (912810UN6) at 1300ET, WI is currently at 4.522%, 9.1bp rich to last month's stop. Today's results will be available shortly after the competitive auctions closes at 1300ET.
- September auction recap: Treasury futures dipped slightly (TYZ5 113-18) after the $13B 20Y Bond auction re-open (912810UL0) reopen traded through, drawing a high yield of 4.613% vs WI yield of 4.615%; Bid-to-cover: 2.74, rebounding from a lower 2.54 in Aug after 2.79 in Jul.
- Peripheral stats: indirect take-up at 64.6% vs. 60.6% prior; direct bidder take-up 27.9% from 21.9% prior; primary dealer take-up of 7.5%.
