European majors are remains broadly pressured this week. the euro extend the post ECB decline against commodity currencies as there was talk of renewing carry trade with euro as the funding currency. This can also be reflected somewhat in the sharp fall in EUR/JPY this week. Meanwhile, Sterling was also dragged down by the common currency in spite of solid economic data released recently. The pound will face some tests from employment data to be released later today. The dollar is mixed and while EUR/USD dips this week, it's staying above 1.3502 low. The Dollar Index is also held below 81 handle despite this weeks recovery. In other markets, Dow 30 and S&P 500 ended nearly flat overnight while Asian equities are mixed.
In US, Treasury sold USD 28b in three year notes with yield at 0.93%, hitting the highest level since May 2011. Purchase by indirect bidders that include other central banks dropped to 26.5%, at the lowest level since April 2013. That's also far below recent average of around 33%. Direct bidders accounted for 19.4% of the sale, slightly higher than recent average at 18.8%. Bid-to-cover ratio was at 3.41, relatively unchanged from prior 3.4. Treasury yield responded positively with 10 year yield closing higher at 2.635.
Technically, we're holding on the view that the 10 year yield, TNX, has completed a three wave decline from 3.036 to 2.402. We'd anticipate further rise in TNX to 2.808 resistance and above. But we'd expect strong resistance below 3.036 to limit upside and bring reversal to extend medium term sideway trading.
On the data front, Japan BSI large manufacturing dropped -13.9% qoq in Q2, domestic CGPI rose 0.3% mom in May. Australia Westpac consumer sentiment rose 0.2% in June. UK will release employment data today and unemployment rate is expected to drop to 3.7% in April. Claimant count is expected to drop -25k in May.