ISRAEL: Al Arabiya-Hamas Submits Gaza Deal Response; US NSA Talks Up Ceasefire
Saudi Arabia's Al Arabiya reports that Hamas has submitted its final response to the draft Gaza ceasefire agreement without any comments. This could indicate Hamas' acceptance of the deal. Al Arabiya: "A Hamas official confirmed on Monday that talks on key issues related to a ceasefire agreement in the Gaza Strip have made progress." Israel claims that it has not received any response from Hamas.
- Israel's N12 reports "Earlier today, a Hamas source told CNN: "We are very close to a ceasefire agreement with Israel." Later, the mediators informed Hamas that they are demanding an answer today - "by midnight." [...] Earlier today, Hamas issued a statement hinting at the imminent release of prisoners.." N12 also reports two gov't offices being instructed to prepare for the arrival of hostages.
- Nadav Elimelech at I24 news reports that Knesset members from Finance Minister Bezalel Smotrich's ultranationalist Religious Zionism have said they will not back such a deal, possibly risking PM Benjamin Netanyahu's majority.
- Speaking to Bloomberg, US National Security Advisor Jake Sullivan said there was a "distinct possibility" of a deal before the transition of power in Washington, D.C., on 20 Jan.
- A ceasefire could see a decline in attacks from Houthi rebels in Yemen, with the war in Gaza being cited as a major factor in their attacks on commercial shipping. A reduction in threat in the Red Sea could see shipping return to the region, reducing the lengthy delay to cargoes from Asia to Europe forced by travelling via the Cape of Good Hope.
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MACRO ANALYSIS: MNI US Macro Weekly: Inflation Data Keep Fed Cut On Track
We have published and e-mailed to subscribers the MNI US Macro Weekly offering succinct MNI analysis across the range of macro developments over the past week. Please find the full report here:
USDCAD TECHS: Fresh Cycle High
- RES 4: 1.4393 2.0% 10-dma envelope
- RES 3: 1.4327 2.382 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 2: 1.4296 2.236 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 1: 1.4246 2.00 proj of the Oct 17 - Nov 1 - 6 price swing
- PRICE: 1.4236 @ 16:38 GMT Dec 13
- SUP 1: 1.4069/3944 20- and 50-day EMA values
- SUP 2: 1.3928 Low Nov 25 and a key support
- SUP 3: 1.3822 Low Nov 6
- SUP 4: 1.3747 Low Oct 17
The trend direction in USDCAD remains up and this week’s gains to a fresh cycle high, reinforces the current bullish theme. The pair has cleared 1.4178, the Nov 26 high, to confirm resumption of the uptrend and maintain the price sequence of higher highs and higher lows. Sights are on 1.4246 next, a Fibonacci projection. Key short-term support has been defined at 1.3928, the Nov 25 low. Initial support to watch lies at 1.4069, the 20-day EMA.
US TSYS: Extending Late Session Lows, Curves Bear Steepen Ahead Next Wed's FOMC
- Treasuries traded steadily lower throughout Friday's session, initially mirroring weak action in Bunds and Gilts. By the close, the Mar'25 10Y contract slipped to 109-26 (-18) the lowest level since November 22, 10Y yield rising to 4.4046% high (+.0768).
- Initial technical support at 109-22 (76.4% Nov 15 - Dec 6 Upleg) followed by 109-20 (Low Nov 20/21).
- Curves bear steepened: 2s10s +2.272 at 15.568 as short end rates outperformed ahead of next week's FOMC policy announcement where another 25bp rate cut was expected but not certain amid current macro and political uncertainty. That said, the latest unemployment and inflation data have kept the FOMC on track to cut the federal funds rate by 25bp (to 4.25-4.50%) next Wednesday.
- Projected rate cuts into early 2025 look near steady to lower vs. this morning levels (*) as follows: Dec'24 cumulative -24.3bp (-23.7bp), Jan'25 -28.6bp (-29.6bp), Mar'25 -42.2bp (-43.9bp), May'25 -48.4bp (-50.5bp).
- No reaction to this morning's import/export prices, Monday brings flash S&P Global PMIs, Retail Sales, IP & Cap-U on Tuesday.
