Halister News

(Bloomberg) -- Focus turns to auction set-ups, though concerns still linger about next week’s EU referendum.

• Treasury supply next week at $106b is offset with no UST cash flows, leaving highest gross supply since Oct. 2014, Citi writes in a client note
• While 2s5s10s has been rallying, momentum is shifting toward 5Y weakness, 10s look rich on 5s10s30s, writes RBS in a client note
• Barclays recommends paying 2y USD swaps as attractive way to position for a potential remain vote in the referendum
  • Recommends short 3s7s10s ahead of belly supply next week, upcoming auction bonds all have room to cheapen
• JPMorgan writes in note that 25Y sector has richened over recent weeks, recommends taking profits on weighted 02/2036s-08/2041-02/2026 butterfly; remains neutral on duration given next week’s risk events
• Last FOMC was perceived as dovish, almost entirely down to the dots, RBC says in a client note; isolating Yellen’s message shows she wasn’t particularly dovish, expect a similar, balanced message during next week’s testimony
• Technicals:
  • Resistance: 132-10 (daily pivot); 132-17 (pivot r1); 132-22+ (June 16 high)
  • Support: 131-23 (pivot s1); 131-18 (June 15 low); 131-09 (June 9 high)