A Quick Technical Overview Of Futures And Recap Of 2s10s Spread Moves

Bund futures ran through last week’s best levels as part of the broader rally in core global FI markets, before running out of steam around 133.40, last dealing back around 133.25, 45 ticks higher on the day. Last week’s price action strengthened the short-term bull cycle in the contract and a continuation higher would open 133.68, the Jul 5 high. For bears, a reversal lower would refocus attention on key support at 130.60, the Jul 10 low. Note that the medium-term trend direction remains down.

• Wider German cash trade sees 1-5bp of richening as the curve bull flattens, with the 2-/10-Year yield curve retracing a little over half of the near 25bp move from inverted cycle extremes seen through the early part of July in recent sessions.