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EURGBP TECHS

Bullish Outlook

FED

Fed Mester: Want Compelling Evidence

FED

Cleveland Fed Mester on May Jobs

GBPUSD TECHS

Remains Below The 50-Day EMA

EURUSD TECHS

Still Trading Below The Bear Channel Top

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JGBS
JGBS: ### POV: Market conditions suggest continuance of buying in super-long
sector, despite the BoJ reduction in purchases in 25+ Year sector. 
- Buying in the super-long end has already been spurred this week by talk that
the Ministry of Finance are considering reducing issuance in 30- and 40-Year
JGB's. This is said to be in response to widening differentials between coupon
rates and long-term rates, especially as the global flattening trend pushes the
Japanese yield curve away from the BoJ's desired slope. 
- Other factors that support a bid include Y16.7tln of redemptions across the
maturity spectrum in December, especially with only Y800bln issued in December
(30-Year auction on Dec 7). Of these redemptions around Y1.2tln will go to life
insurers. JPY hedged treasury yields have declined recently which could induce
lifers to avoid other asset classes and stick with JGB's, MNI sources note that
a 30-Year yield over 0.80% is seen as attractive. 
- Also, November is anecdotally a large index extension month and the Y10bln
reduction  in BoJ Rinban ops is smaller than the reduction in other sectors that
bounced back after an initial selloff.

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