BUND TECHS: (H5) Corrective Pullback Remains In Play
Dec-13 05:58
- RES 4: 137.72 High Oct 1 and a key resistance
- RES 3: 137.28 High Oct 2
- RES 2: 136.52/137.18 High Dec 6 / 2 and the bull trigger
- RES 1: 136.01 High Dec 12
- PRICE: 134.94 @ 05:42 GMT Dec 13
- SUP 1: 134.82 Low Dec 12
- SUP 2 134.59 50.0% retracement of the Nov 6 - Dec 2 bull cycle
- SUP 3: 133.98 61.8% retracement of the Nov 6 - Dec 2 bull cycle
- SUP 4: 133.62 Low Nov 22
The current bearish corrective cycle in Bund futures remains in play and yesterday’s extension signals scope for a continuation of the bear leg near-term. Price is trading at this week’s lows and sights are on 134.59, a Fibonacci retracement point. A break of this level would strengthen the current downleg. For bulls, a reversal higher would signal the end of the correction. First resistance is yesterday’s high of 136.01.
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US TSYS: BLOCK - Likely Buyer TU
Nov-13 05:35
- +1,429 TUZ4 at 102-18⅝, post time 16:08.00 ADST, DV01 $52,500. Contract last trades 102-18+
US TSYS: Tsys Futures Edge Lower, Focus On CPI Later
Nov-13 05:19
- Tsys futures are off session highs, and now trade slightly lower for the session. TU is -00⅝ at 102-18+ vs the overnight lows of 102-17⅝, TY is trading -01 at 109-12+ vs overnight lows of 109-10.
- 10yr Dec'24 futures remain in a bearish trend with last week’s move lower reinforces the downtrend and the contract is trading closer to its recent lows. A resumption of the bear leg would open 109-05 next, the 76.4% retracement of the Apr - Sep bull cycle (cont). The 109-00 handle remains exposed too. Initial firm resistance is seen at 111-29+, the 20-day EMA.
- Overnight the selloff led to a sharp tightening of SOFR 10yr swap spreads, which dropped around 3bps, marking the largest one-day tightening since March 2023. The spreads fell to -48bps after peaking at -46.8bps earlier in the session, the move follows a period of spread widening after the US election, reflecting investor reactions to potential deregulation.
- The cash tsys yields are slightly higher again today following overnight bear-steepening move where yields closed 8-13bps higher. The 2yr is 4.342%, while the 10yr is 4.429% only 5bps off the highs made on Nov 6. The 2s10s is -0.420 at 7.899, while ovenright the 2s7s30s fly cheapened 8bps.
- Projected rate cuts into early 2025 compared to early Tuesday levels (*): Dec'24 cumulative -15.5bp (-17.2bp), Jan'25 -23.0bp (-25.2bp), Mar'25 -36.0bp (-38.2bp), May'25 -41.8bp (-44.3bp).
- Later today we have MBZ Mortgage Applications, followed by CPI.
CHINA: Bond Wrap: China Issuing in USD again.
Nov-13 05:18
- China Begins to Market in Saudi Arabia Its First Dollar Bonds in Three Years (source: BBG).
- China Taps Global Bankers for Feedback to Lift Market Confidence (source: BBG).
- Equity markets struggling again today with the Hang Seng -0.63%, Shenzhen Comp -0.97%, Shanghai Comp flat whilst CSI 300 +0.07%.
2yr 1.405% 5yr 1.708% 10yr 2.069% 30yr 2.234%
