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Attention turns to the FOMC

BUNDS
  • Although Bund shows in a the red overnight and into the cash open, the contract remains elevated, after EGBs Futures all closed their opening gaps yesterday, reversing some of the US ISM beat on Monday.
  • The contracts benefitted from safer haven flow, as Bank stocks collapsed on continued local Bank credit fears in the US.
  • Futures were also boosted , by the US JOTS and Factory order miss yesterday.
  • Main upside target for Bund is at the next gap up to 137.28 (from 136.62 to 137.28).
  • Support moves up to 135.68, followed by 135.23 initially.
  • There's no tier data out of Europe, and on the other side of the Pond sees, US ADP, Final services PMI, ISM services.
  • Most investors will have their eyes on the FMOC and presser, when a 25bps hike is expected, will it be hike and done?
  • SUPPLY: UK £4bn 2025 (equates to 9.1k Gilt) should have limited impact. Germany EU3bn 7yr (Equates to 15.6k Bund) should have limited impact.
  • SPEAKERS: Fed Powell's presser.

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