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USDCAD TECHS

Corrective Cycle Still In Play

AUDUSD TECHS

50-Day EMA Still Provides Support

EURJPY TECHS

Corrective Pullback

USDJPY TECHS

Approaching The Next Objectives

EURGBP TECHS

Attention Is On The 20-day EMA

     
US TSY SUMMARY: Rates and Equities surged to new session highs after eagerly
awaited Trump press conf delivered little bite: US terminating
relationship/funding with WHO, take action to stop entry of some foreign
nationals, take action on Chinese firms listed on US exchanges.
- Little in the way of month end flow after the bell, though equities continued
to inch higher (ESM0 +6.0 at 3044.0).
- Little to no react to Fed speakers ahead blackout period tonight through June
11. Fed Chair Powell: Fed "not close to any limits" to what it can do, still has
"authority to react"; evidence whether neg rates actually helps pretty ambiguous
as it interferes w/ credit allocation and crushes down on bank margins. Fed
Mester: "RECOVERY COULD BE SLOW, HARD TO IMAGINE IT AS V-SHAPED" Bbg"
- MNI Chicago Business Barometer Falls Further To 38-Year Low (32.3 MAY VS 35.4
APR); more than 40% of the respondents expect Covid-19 to have an impact on
business plans for more than 9 months.
- The 2-Yr yield is down 1.2bps at 0.1583%, 5-Yr is down 4bps at 0.2989%, 10-Yr
is down 4.4bps at 0.6461%, and 30-Yr is down 4.6bps at 1.4064%.
TECHNICALS:
US 10YR FUTURE TECHS: (U0) Well Supported  
*RES 4: 140-27   0.618 projection of Feb 6 - Mar 9 rally from Mar 18 low
*RES 3: 140-00   Round number resistance 
*RES 2: 139-25   Contract high, Mar 25
*RES 1: 139-13+/16  High May 15 / High Apr 21 and key resistance  
*PRICE: 139-08+ @ 16:23 BST, May 29
*SUP 1: 138-09   Low May 18
*SUP 2: 137-30+ Low May 6 and key support
*SUP 3: 137-19+ Low Apr 14
*SUP 4: 136-20   Low Mar 25
10yr futures continue to trade sideways within its current range. The range
parameters are 139-16 at the top and 137-30+ at the base. The underlying theme
remains bullish, however futures still need to clear 139-16, Apr 21 high to end
the current consolation and confirm a resumption of the uptrend that would
target 139-25, Mar 25 contract high and the 140-00 handle. Clearance of 137-30+,
May 6 low would be bearish and expose 137-19+.
AUSSIE 3-YR TECHS: (M0) Softer Within The Range 
*RES 3: 100.000 - Handle Psychological Resistance
*RES 3: 99.840 - Range projection on a break of 99.780
*RES 1: 99.780 - High Apr 01 and bull trigger 
*PRICE: 99.735 @ 16:15 BST May 29
*SUP 1: 99.728 - Lower 2% Bollinger Band
*SUP 2: 99.720 - Low Apr 14 / 15
*SUP 3: 99.645 - Low Mar 20
The short-end of the Aussie bond market has pulled back from recent highs. The
contract continues to trade within a range that has been in place since peaking
at 99.780 on Apr 1. A break of this resistance is required to confirm a
resumption of the broader uptrend and open 99.840, the range projection and the
100.00 psychological level further out. The base of the range at 99.720, low Apr
14/15 and marks the key near-term support.
AUSSIE 10-YR TECHS: (M0) Key Supports Remain Intact
*RES 3: 99.4850 - High Mar 10 and bull trigger
*RES 2: 99.3600 - High Apr 01 
*RES 1: 99.2250 - High Apr 17 
*PRICE: 99.1250 @ 16:30 BST, May 29
*SUP 1: 99.0200 - Low Apr 9
*SUP 2: 98.7800 - Low Mar 23 
*SUP 3: 98.5700 - Low Mar 20 
10yr futures settled at the lower-end of the recent range into the close Friday.
Key support remains at 99.0200, Apr 9 low where a break is still required to
confirm a near-term bearish outlook. The lower peaks since Apr 2 suggest futures
are likely to break the support eventually. This would open 98.7800 initially,
Mar 23 low. On the upside, key resistance is located at 99.2250, the Apr 17
high. Clearance of this level would instead be bullish.
JGB TECHS: (M0): Turning Lower
*RES 3: 154.56 - High Mar 13 
*RES 2: 153.50 - High Mar 16
*RES 1: 153.06 - High Mar 31 and key resistance
*PRICE: 152.16 @ 16:34 BST, May 29
*SUP 1: 152.15 - Low May 12 / 27
*SUP 2: 151.86 - Low Apr 9
*SUP 3: 151.59 - Low Mar 26 
JGB futures closed close to the week's lows, keeping focus on recent support at
152.15/16 and a fall through here will damage the outlook. A break if seen,
would concern bulls and expose the 152.00 handle and support at 151.86, Apr 9
low. An ability to hold above supports and more importantly a break of 153.06,
Mar 31 high is required to confirm a bullish cycle and allow for a recovery
towards 153.30, Mar 16 high.
TSY FUTURES CLOSE: Well bid after the bell but off late session highs as rates
and equities extended rally after Trump press conf. Update: 
* 3M10Y  -3.721, 50.534 (L: 50.026 / H: 54.117)
* 2Y10Y  -2.857, 48.549 (L: 48.353 / H: 51.701)
* 2Y30Y  -2.65, 124.941 (L: 124.285 / H: 129.37)
* 5Y30Y  -0.23, 110.963 (L: 109.795 / H: 113.717); Current futures levels:
* Sep 2-Yr futures up 1.125/32 at 110-13.25 (L: 110-12.375 / H: 110-13.75)
* Sep 5-Yr futures up 7.5/32 at 125-20.25 (L: 125-13.75 / H: 125-21)
* Sep 10-Yr futures up 12.5/32 at 139-1.5 (L: 138-24 / H: 139-03.5)
* Sep 30-Yr futures up 1-5/32 at 178-7 (L: 177-10 / H: 178-16)
* Sep Ultra futures up 2-07/32 at 217-23 (L: 215-27 / H: 218-06)
US TSYS/SUPPLY: US Tsy bill/note auctions scheduled for next week
DATE     TIME   AMOUNT   SECURITY    (CUSIP)/ANNC
-------------------------------------------------
01 Jun  1130ET   $63B    13W Bill     (912796XH7)
01 Jun  1130ET   $54B    26W Bill     (912796TU3)
02 Jun  1130ET   $65B    42D Bill     (9127962J7)
02 Jun  1130ET   $40B   119D Bill     (912796SZ3)
04 Jun  1130ET   TBA     4W Bill      02 Jun Annc (9127963C1)
04 Jun  1130ET   TBA     8W Bill      02 Jun Annc (9127963M9)
MONTH-END EXTENSIONS: FINAL Bloomberg-Barclays US month-end index extension;
forecast summary compared to the avg increase for prior year and the same time
in 2019. TIPS -0.01Y; Govt inflation-linked, -0.01.
*........................EST.....1Y Avg Incr..Last Year
*US Tsys.................0.14........0.09........0.11
*Agencies................0.02........0.03........0.01
*Credit..................0.14........0.11........0.08
*Govt/Credit.............0.14........0.10........0.10
*MBS.....................0.07........0.06........0.05
*Aggregate...............0.12........0.09........0.09
*Long Govt/Credit........0.13........0.09........0.10
*Interm Credit...........0.12........0.09........0.08
*Interm Govt.............0.10........0.08........0.08
*Interm Govt/Cred........0.12........0.08........0.08
*High Yield..............0.10........0.11........0.04
US EURODLR FUTURES CLOSE: Steady in the short end to moderately firmer out the
strip -- just off late session highs. Current White pack levels:
* Jun 20 steady at 99.698
* Sep 20 +0.005 at 99.720
* Dec 20 steady at 99.695
* Mar 21 +0.010 at 99.780
* Red Pack (Jun 21-Mar 22) +0.015 to +0.025
* Green Pack (Jun 22-Mar 23) +0.030 to +0.035
* Blue Pack (Jun 23-Mar 24) +0.035 to +0.035
* Gold Pack (Jun 24-Mar 25) +0.035 to +0.040
US DOLLAR LIBOR: Latest settles
* O/N -0.0015 at 0.0615% (+0.0008/wk)
* 1 Month +0.0098 to 0.1825% (+0.0087/wk)
* 3 Month -0.0060 to 0.3440% (-0.0252/wk)
* 6 Month -0.0052 to 0.5098% (-0.0602/wk)
* 1 Year -0.0034 to 0.6735% (-0.0083/wk)
STIR: Federal Reserve Bank of New York EFFR for prior session:
* Daily Effective Fed Funds Rate: 0.05%, volume: $70B
* Daily Overnight Bank Funding Rate: 0.05%, volume: $182B
US TSYS: REPO REFERENCE RATES (rate, volume levels reflect prior session):
* Secured Overnight Financing Rate (SOFR): 0.06%, $1.031T
* Broad General Collateral Rate (BGCR): 0.05%, $449B
* Tri-Party General Collateral Rate (TGCR): 0.05%, $443B
FED: NY Fed lowers daily avg Tsy sec buys to $4.5B next wk ($22.5B total) from
$5B daily average this wk
NY Fed operational purchases schedule for Monday
* 1100-1120ET: Tsy 0Y-2.25Y, appr $7.0B
NY Fed operational purchases schedule for Tuesday
* 1010-1030ET: Tsy 7Y-20Y, appr $2B
* 1100-1120ET: TIPS 1Y-7.5Y, appr $1B
NY Fed operational purchases schedule for Wednesday
* 1100-1120ET: Tsy 20Y-30Y, appr $3.0B
NY Fed operational purchases schedule for Thursday
* 1010-1030ET: Tsy 4.5Y-7Y, appr $3.5B
* 1100-1120ET: TIPS 7.5Y-30Y, appr $1B
NY Fed operational purchases schedule for Friday
* 1010-1030ET: Tsy 2.25Y-4.5Y, appr $5B
OUTLOOK: *** US Data/speaker calendar (prior, estimate):
30-May Fed enters blackout period through June 11 (FOMC Jun 9-10)
-
01-Jun 0945 May IHS Markit Mfg Index (final) (39.8, 40.4)
01-Jun 1000 May ISM Manufacturing Index (41.5, 43.5)
01-Jun 1000 Apr construction spending (0.9%, -6.0%)
01-Jun 1130 US Tsy $63B 13W Bill auction (912796XH7)
01-Jun 1130 US Tsy $54B 26W Bill auction (912796TU3)
PIPELINE: $270.9B High-grade debt issued in May, nearly $1T total over last 3
months!
Date $MM Issuer/Rating/Desc/Maturity/Yld; Priced *; Launch #
Nothing on tap for Friday as yet
-
$7.5B Priced Thursday; $36.2B/wk
05/28 $3.5B *HSBC Holdings $2B 6NC5 +175, $1.5B 11NC10 +215
05/28 $2B *Health Care Srvc Corp $500M 5Y +120, $750M Each 10Y +155, 30Y +180
05/28 $1.25B *Bank of Nova Scotia Perp NC5 4.90%
05/28 $750M *Yara 10Y +245 
Eurodollar/Tsy options
EURODLR OPTIONS:
* near 5,000 Jul/Auq 95/96 put strip/strip, paying 6.0 to buy all four legs
* 14,000 Mar 98/100 call spds
* in addition to call fly sale on open, +8,000 Sep 97/98/100 call trees at 2.0
* small buyer Red pack 97 straddle strip buyer at 119.5
* 16,600 Green Jun 96 calls, 12.5
* 7,750 Green Jul 97 calls 3.50
* -10,000 Green Jun 97 puts, 3.5
* 5,000 Blue Jul 92 puts
* 3,500 Blue Sep 92/97 strangles
* -20,000 Sep 97/98/100 call flys, 1.75
* 2,000 Dec 90 puts, cab little earlier
* 2,000 Green Sep 96 puts vs. Blue Sep 90/95 put spds
Tsy options
* 6,500 TUQ 109.8 puts, 1/64
* 2,500 FVN/FVU 127 call spd on 2x1 basis
* +1,500 TYQ 140/141 call spds, 12/64
* -9,800 FVU 126/126.5 call spds, 7/64
* ongoing vol sales via TYU 139 straddles at 1-63/64
--MNI Chicago Bureau; tel: +1 312-431-0089; email: bill.sokolis@marketnews.com
[TOPICS: MTABLE,M$U$$$,M$$FI$,MN$FI$,MN$FX$]
MNI Chicago Bureau | +1 312-431-0089 | bill.sokolis@marketnews.com