UK: 53 Labour MPs Abstain On Winter Fuel Vote, Gov't Still Wins By Large Margin
Efforts by the main opposition centre-right Conservatives to block the removal of universal winter fuel payments failed, with the House of Commons voting by a margin of 348-228 to defeat the motion. Jack Elsom at The Sun reports that 53 Labour MPs abstained (or were 'paired'') on the motion, with one - MP for Normanton and Hemsworth Jon Trickett - voting against the gov't.
- Henry Zefferman at the BBC notes: "...the numbers look slightly worse for the government than most people I spoke to in Westminster this morning were anticipating. This was Sir Keir Starmer’s second controversial parliamentary vote. For the first, in July, his whips managed to turn out 363 of their MPs to support the maintenance of the two-child benefit cap. This time that number has fallen. That suggests the number of abstentions was greater."
- Nevertheless, even with a larger number of abstentions than expected the gov't still prevailed with a sizeable majority of 120 votes. As such, this would indicate that even unpopular measures that cause unease among some on the Labour backbenchers are likely to receive Commons approval. Given PM Sir Keir Starmer's pronouncements in recent weeks about 'tough decisions' to come ahead of the 30 Oct budget, this large vote bugger could prove valuable.
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USDCAD TECHS: Pierces The 50-Day EMA
- RES 4: 1.4048 High May 22 2020
- RES 3: 1.4000 Round number resistance
- RES 2: 1.3977 High Oct 13, 2022
- RES 1: 1.3856/3946 High Aug 6 / 5
- PRICE: 1.3729 @ 16:36 BST Aug 9
- SUP 1: 1.3731/18 50-day EMA / Intraday low
- SUP 2: 1.3657 Low Jul 17
- SUP 3: 1.3589 Low Jun 11 and a key support
- SUP 4: 1.3547 Low Apr 9
Trend conditions in USDCAD remain bullish and recent gains reinforce this theme. A key resistance at 1.3846, the Apr 16 high, has been cleared. This signals scope for 1.3977, the Oct 13 ‘22 high. Near-term, the pair has pulled back from Monday’s high. A move lower appears to be a correction and is allowing an overbought condition to unwind. The 50-day EMA, at 1.3731, has been pierced. A clear break would expose 1.3657, the Jul 17 low.
US TSYS: Curves Twist Flatter, Rate Cuts Cool As Recession Concerns Ease
- Treasuries are mostly firmer after the bell, curves flatter (2s10s -5.920 at -11.155) with the short end underperforming on a relatively quiet end to a hectic week with no scheduled data, Fed speak or Tsy supply Friday.
- Treasury futures spiked higher early in the week as recession concerns climbed following last Friday's employment data, 10Y futures surge to 115-03.5 high Monday, 10Y yield fall to 3.6653% low.
- Markets spent the rest of the week scaling back support as recession cares cooled.
- Tsy Sep'24 10Y futures currently trade +8 at 112-29, vs. 112-21, well below technical resistance at 114-03/115-03+ (High Aug 6 / 5 and the bull trigger).
- Projected rate cut pricing into year end were well off Monday's highs (*): Sep'24 cumulative -39.4bp (-54.3bp), Nov'24 cumulative -70.5bp (-95.9bp), Dec'24 -102.2bp (-128.1bp).
- Focus on next week's PPI, CPI, Retail Sales, Home sales data and UofM inflation expectations.
EURJPY TECHS: Outlook Remains Bearish
- RES 4: 167.44 50-day EMA
- RES 3: 164.75 20-day EMA
- RES 2: 162.89 High Aug 1
- RES 1: 161.59 High Aug 2
- PRICE: 160.03 @ 16:31 BST Aug 9
- SUP 1: 157.30 / 154.42 Low Aug 6 / 5
- SUP 2: 153.87 Low Dec 14 ‘23
- SUP 3: 153.23 Low Dec 7 ‘23 and a key support
- SUP 4: 151.42 Low Jul 28 ‘23
EURJPY traded sharply lower Monday marking an extension of the current impulsive bear cycle, before recovering from the session low. The move down opens the next key support at 153.23, the Dec 7 ‘23 low. A break of this price point would strengthen a bearish theme. Note that the cross remains in an extreme oversold position. A stronger recovery would allow this to unwind. Initial resistance is seen at 161.59, the Aug 2 high.
