GBPUSD TECHS: Watching Support
- RES 4: 1.2772 High Apr 26
- RES 3: 1.2690 50-day EMA
- RES 2: 1.2667 High May 27 and key short-term resistance
- RES 1: 1.2590 High Jun 3
- PRICE: 1.2466 @ 15:32 BST Jun 7
- SUP 1: 1.2431 Low Jun 7
- SUP 2: 1.2317 Low May 17
- SUP 3: 1.2277 76.4% retracement of the May 13 - 27 upleg
- SUP 4: 1.2156 Low May 13 and the bear trigger
GBPUSD traded lower but has found support at 1.2431 - for now. Attention is on a key resistance at the 50-day EMA that intersects at 1.2690 Tuesday. Clearance of this average is required to strengthen short-term bullish conditions. The broader trend direction is down though and the trigger for a resumption of the downtrend is 1.2156, May 13 low. A deeper pullback would expose 1.2317 initially, the May 17 low.
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US TSYS: Yield Curves Bear Steepen, Focus on Fed over Jobs Data
Yield curves continued to bear steepen Friday, 2s10s session high of 43.067 back to early March levels as bond yields climbed to 3.2338% high -- last seen early December 2018. Relative calm end to the week for a NFP session.
- Tsy futures bounced higher briefly, scaled back amid steady selling after Apr NFP jobs gained more than estimated +428k vs. +380k est, avg hourly earning little weaker than exp at 0.3% vs. 0.4% est. Total down-revisions to Feb-Mar -39k.
- Fed out of blackout: limited react to essay published by Minneapolis Fed Pres Kashkari: Long-Term Real Rates Are Already Back To Neutral. ""If the economy is in fact in a higher-pressure equilibrium, that might indicate the neutral long-term real rate has increased, which would then require even higher rates to reach a contractionary stance that would bring the economy into balance."
- MNI interview w/ Richmond Fed Barkin: interest rate increases are not on a preset course and he would like to see interest rates on a path to normal that is as fast as feasible, backing this week's historic FOMC decision to raise the fed funds rate 50bps, while not ruling out the potential for a supersized 75bp increase if needed.
US: Late Corporate Credit Update: Back Near 2Y Highs Late
Investment-grade corporate credit risk has see-sawed back near new 2Y highs tapped early Friday, closing levels well off midday lows as stocks traded modestly weaker: S&P E-Mini Future down 30.25 points (-0.73%) at 4113.75
- Investment grade risk measured by Markit's CDXIG5 index currently +3.464 at 86.919 vs. new 2Y high of 87.321 around midmorning; CDXHY5 high yield index at 100.813 (-0.837).
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- Lagging sectors (wider or least narrow): Utilities (+1.4) followed by Technology and Consumer Discretionary (+1.3).
US STOCKS: Late Equity Roundup: Mildly Lower on Week
Equity indexes weaker into the close are off session lows, upper half of range SPX emini futures, ESM2 currently -30.25 points (-0.73%) at 4113.75 -- near week opener of 4146.25.
- Earnings cycle past the halfway mark, resumes Monday w/ Duke Energy (DUK), Tyson (TSN) before the open, Trex (TREX), Int Flavor/Fragrances (IFF), Cargurus (CARG) after the close.
- SPX leading/lagging sectors: Energy sector extends earlier gains (+2.91%) O&G consumables outpacing energy and equipment serving names. Utilities sector follows (+0.81%). Laggers: Materials sector holding near lows (-1.40%) w/ construction materials shares lagging; Communications sector (-1.30%).
- Meanwhile, Dow Industrials currently trades -97.15 points (-0.29%) at 32901.08, Nasdaq -173 points (-1.4%) at 12144.66.
- Dow Industrials Leaders/Laggers: United Health outperforms (UNH) +5.10 at 499.82, Chevron (CVX) +4.00 at 170.26. Laggers: Home Depot (HD) continues to sag -4.47 at 294.64, Nike (NKE) -3.62 at 115.01.
