UST MORNING CALL: Opening Gap Leaves Strong Resistance
Source: BFW (Bloomberg First Word)
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UUID: 7947283
(Bloomberg) -- EU referendum poll swings continue to drive markets; USTs supply ahead, low expectations from Yellen testimony.
Alert: HALISTER1- CFTC data show speculative accounts continued to be large net buyers of UST futures across the curve after meaningful short-covering the prior week, Nomura writes in a client note
- Large buying seen in TU ($8.1b) and new longs in EDs (+328k) shows speculatives don’t believe Fed hikes are around the corner: Nomura
- Opening jump in yields has created significant opening gap of 1.608% to 1.640%, should provide very meaningful resistance, CRT write in a client note
- Yellen to give testimony to Congress this week, unlikely to add any information that would be pertinent to front-end pricing beyond what was said at the latest FOMC, writes Citi in a client note
- JPMorgan stops out of 5Y UST shorts, Citi suggests lightening up on duration longs, Deutsche Bank recommends buying Treasury dips on any post-vote relief trade: MORE
- Technicals:
- Resistance: 131-26 (June 17 low); 132-03+ (June 16 low)
- Support: 131-11+ (38.2% Fibo of May 31-June 16 rally); 131-09 (June 9 high); 131-00+ (June 10 low)
Source: BFW (Bloomberg First Word)
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UUID: 7947283