What to Watch: Data Picks Up, Equity Earnings Surge
FI markets trading firmer, 30Y bond futures nearing Mon highs - April 14 levels (USM2 +24 at 142-09; 30YY slips to 2.8595 low). Yield curves near steady, 2s10s +.181 at 18.956, 5s30s still inverted at -3.862 (+0.597).
- Data on tap (prior, est):
- Durable Goods Orders (-2.1%, 1.0%); ex-trans (-0.6%, 0.5%) at 0830ET
- Cap Goods Orders Nondef Ex Air (-0.2%, 0.4%); Ship (0.3%, 0.5%), 0830ET
- FHFA House Price Index MoM (1.6%, 1.5%), 0900ET
- S&P CoreLogic CS 20-City MoM SA (1.79%, 1.50%), 0900ET
- Conf. Board Consumer Confidence (107.2, 108.2), 1000ET
- Richmond Fed Manufact. Index (13, 9), 1000ET
- New Home Sales (772k, 765k); MoM -2.0%, -0.9%), 1000ET
- Treasury supply:
- US Tsy $48B 2Y Note auction (91282CEK3)
- Wednesday auctions continue with $24B 2Y FRN and $49B 5Y Notes
- No Fed speakers with Fed in Blackout through May 5, day after next FOMC policy annc.
- Stocks weaker: SPX eminis scaling back modest carry-over overnight bid following late Mon' bounce on Musk/Twitter buyout acceptance. Earnings resume, heaviest release schedule so far: ARCH, ADM, MMM, GE, WM, PEP beating ests this morning. After the close: GM, GOOGL, MSFT, TXN, V.
- Geopol risk: Market remains alert for developments on Russia war in Ukraine, knock-on effect to markets. Pentagon spox John Kirby on CNN: "We want Russia not to be able to threaten their neighbors again in the future". US watching events in Moldova and the breakaway region of Transnistria closely, but that it is too soon to comment on the reported explosions in the Transnistrian capital Tiraspol.
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Historical bullets
USDCAD TECHS: Eyeing Key Support
- RES 4: 1.2924 High Dec 22
- RES 3: 1.2871/2901 High Mar 15 / High Mar 8 and a key resistance
- RES 2: 1.2778 High Mar 16
- RES 1: 1.2669 20-day EMA
- PRICE: 1.2500 @ 16:35 GMT Mar 25
- SUP 1: 1.2498/99 Low Mar 25 / Jan 21
- SUP 2: 1.2475 2.0% Lower Bollinger Band
- SUP 3: 1.2454 Low Jan 19 and a key support
- SUP 4: 1.2387 Low Nov 10 2021
USDCAD traded to a new cycle low Friday. This week’s move lower and most recently, a break of 1.2552, the 76.4% retracement of the Jan 19 - Feb 24 rally, reinforces a bearish theme and signals scope for an extension lower. The focus is on the Jan 21 low of 1.2499 and 1.2451, the Jan 19 low. On the upside, initial firm resistance is seen at 1.2669, the 20-day EMA. A break of this average would ease current bearish pressure.
US: Public Opinion Of US Leaders Remains Low
The daily favourability ratings of US political leaders continues to reflect a mistrust of politicians amongst voters.
- the Real Clear Politics favourability rating also provides some context to President Biden's low approval rating. Both Republican and Democrat leaders continue to have low approval.
- Senate Minority Leader Mitch McConnell has the lowest rating with -34 approval. This reflects his association with the GOP establishment opposed by former president Donald Trump.
- Trump is the political 'leader' with the highest favourability with -6.1 but he is only marginally ahead of President Biden who sits at -9.2.
Favourability Ratings: US political Leaders Real Clear Politics
AUDUSD TECHS: Fresh YTD High
- RES 4: 0.7599 High Jul 6 2021
- RES 3: 0.7556 High Oct 28 and a key resistance
- RES 2: 0.7537 High Mar 25
- RES 1: 0.7533 2.0% 10-dma envelope
- PRICE: 0.7506 @ 16:33 GMT Mar 25
- SUP 1: 0.7450/7376 Low Mar 23 / Low Mar 22
- SUP 2: 0.7343 20-day EMA
- SUP 3: 0.7271 50-day EMA
- SUP 4: 0.7165 Low Mar 15 and a key support
AUDUSD strengthened further early Friday and continues to deliver new YTD and multi-month highs. This week’s important technical break has been the move above 0.7441, the Mar 7 high, marking an extension of the strong reversal from 0.7165, Mar 15 low. This reinforces the current bull cycle that started Jan 28. The break of 0.7441 signals scope for a climb towards 0.7556, the Oct 28 high. Initial firm support is seen at 0.7376.
