OUTLOOK: Price Signal Summary - Bull Cycle In Bunds Remains In Play
Feb-07 12:24
- In the FI space, Bund futures remain in a bull cycle and the contract is holding on to its latest gains. Price has recently cleared resistance at 132.22, the Jan 22 high, and is through both the 20- and 50-day EMAs. The break higher confirms a resumption of the corrective bull cycle that started Jan 14. Sights are on 133.73, 50.0% of the Dec 2 - Jan 14 bear leg. First support is at 132.46, the 20-day EMA.
- A bullish phase in Gilt futures remains in play, signalling scope for a continuation higher near-term. This week’s extension reinforces current conditions. The contract has traded through 93.09, the Dec 20 high, and breached 93.64, the 61.8% retracement of the Dec 3 - Jan 13 bear leg. Sights are on the 94.75, the 76.4% retracement. Initial firm support lies at 92.32, the 20-day EMA.
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BONDS: German Yields are through the next resistances
Jan-08 12:20
- With German Bund through 131.59, the Yield is testing 2.55%, and further out would see 2.60% next, this equates to 131.06.
- We noted earlier the 127.82 support in UBH5, which equated to the November high for the 30yr Yield at 2.753%, this is now being tested, printing a 2.758% high, highest since early July.
- French OAT has broken below the 122.00 figured, and the 10yr Yield will now be targeting the 2024 high in Yield.
PIPELINE: Council of Europe Dev Bank 5Y SOFR Launched
Jan-08 12:15
While domestic issuers have stepped receded after the record issuance since Monday ($96.5B), foreign bank and supra sovereign US$ issuance continues:
- Date $MM Issuer (Priced *, Launch #)
- 01/08 $6B *World Bank 7Y +54
- 01/08 $1.5B #CoE Dev Bank 5Y SOFR+42
- 01/08 $Benchmark NWB 5Y SOFR+50a
- 01/08 $Benchmark IADB 5Y SOFR+42a
- 01/08 $Benchmark Ontario 5Y SOFR+58
- 01/08 $Benchmark Kommunalbanken 5Y +48
- 01/08 $Benchmark Indonesia 5Y 5.65%a, 10Y 5.95%a
GILT TECHS: (H5) Downtrend Accelerates
Jan-08 12:12
- RES 4: 93.09 High Dec 20
- RES 3: 92.88 20-day EMA
- RES 2: 92.13/60 High Jan 7 / 3
- RES 1: 91.58 Intraday high
- PRICE: 90.48 @ 12:01 GMT Jan 8
- SUP 1: 90.29 Intraday low
- SUP 2: 90.00 Psychological round number
- SUP 3: 89.64 2.236 proj of the Dec 20 -27 - Jan 2 price swing
- SUP 4: 8943 2.382 proj of the Dec 20 -27 - Jan 2 price swing
The trend condition in Gilt futures is unchanged, it remains bearish and this week’s fresh cycle lows reinforces current conditions. Today’s sell-off highlights an acceleration of the trend and maintains the price sequence of lower lows and lower highs. Sights are on the 90.00 psychological handle. Initial resistance is at 91.58, today’s intraday high. Resistance at the 20-day EMA, is at 92.88, and the average is seen as an important hurdle for bulls.
