Halister News

(Bloomberg) -- Treasury futures (TY1) technical levels in focus for Friday.

• Daily Trend Bias: Bullish w/caution
• Comment: Second day pullback as risk-appetite sustains; despite this, near-term upside profile still holds; buyers may show stronger resolve closer to 21-DMA at 126-05; failure here may expose 125-29 key support
  • Resistance: 126-18/19; 126-25+; 126-28
  • Support: 126-05/126-03+; 125-29; 125-21+
• NOTE: Roll-adjusted by difference in GFUT
• NOTE: Sejul Gokal is a FICC technical strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice

To contact the reporter on this story: Sejul Gokal in London at sgokal1@bloomberg.net To contact the editors responsible for this story: Ven Ram at vram1@bloomberg.net Scott Hamilton

(Bloomberg) -- Treasury and bund futures skews are fading the Korea risk premium and are now re-building the downside.

• Sept. bund skew has flipped back to the downside (see chart here), which has an expiry date falling in the middle of Jackson Hole from Aug. 24-26
• Oct. contract, which expires on Sept. 22, covers the whole of Jackson Hole (in case Draghi speaks on Saturday) and ECB meeting on Sept. 7 (see chart here highlighting the paring of call skew)
• TY Sept. futures low-delta put skews have started to re-build over the last two days; see chart here
• Selective hedges make sense amid fading flight-to- quality rallies with U.S. and South Korean military exercises from Aug. 21 posing headline risks while thin summer markets may exacerbate moves; this may keep bunds from fully unwinding geopolitical risks in the near term
• The Korean market response has been modest with domestic implied volatility below/near long-term averages, highlighting that the pricing of an all-out conflict in the peninsula remains remote; see more here
• NOTE: Tanvir Sandhu is an interest-rate and derivatives strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice

To contact the reporter on this story: Tanvir Sandhu in London at tsandhu17@bloomberg.net

--SHAJI MATHEW

(Bloomberg) -- Thyssenkrupp’s “end goal is clearly to eventually exit steelmaking,” analysts at Jefferies led by Seth Rosenfeld say in note on joint venture discussions with Tata Steel.

• “With steel industry tailwinds at their back, and should the deal be structured in an attractive manner for equity investors, it is possible we see an IPO of TKA-Tata sooner than” 2-3 years
• Thyssenkrupp price target raised to EU40/share from EU32/share previously
• NOTE: Aug. 11, Thyssenkrupp Tata steel JV has key hurdle removed: Jefferies

To contact the reporter on this story: Tino Andresen in Dusseldorf at tandresen1@bloomberg.net To contact the editors responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net Tony Barrett