HUNGARY: Annual Average Gross Wage Growth Above Expectations in June
* Hungary's average gross wages for businesses with at least 5 employees rose 9.7% y/y in June ver...
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STIR: ECB Pricing Little Changed In Wake Of U.S.-EU Trade Deal
Little net movement in EUR STIRs as core global FI futures have pared the initial downtick that followed weekend confirmation of the U.S.-EU trade deal.
- Ongoing uncertainty surrounding Sino-U.S. relations, lower expected inflation outcomes stemming from the weekend deal and continued headline uncertainty limit the initial weakness in bonds, even with equities rallying and growth risks lessened.
- Euribor futures flat to +3.5. ERZ5 registered the lowest level since April on Friday, while ERZ6 respected May lows. Early flow of note comes from the previously covered seller of the ERH9/M9 spread.
- ECB-dated OIS shows 15.5bp of easing through year-end, before pricing just under 20bp of cuts through March, representing ~60% and ~80% odds of an interest rate cut being enacted through the respective junctures.
- Comments from ECB’s Escriva due at 08:30 London/09:30 CET.
- Little else of note on the regional calendar, which will leave focus on wider macro matters (any ongoing adjustment the U.S.-EU trade deal and Sino-U.S. discussions in Stockholm).
- Looking further ahead, the ECB’s inflation expectations survey (Tuesday), wage tracking data & (Wednesday), Eurozone GDP (Wednesday) & Eurozone HICP (Friday) present the major regional releases of note through the week.
ECB Meeting | €STR ECB-Dated OIS (%) | Difference Vs. Current Effective €STR Rate (bp) |
Sep-25 | 1.887 | -3.8 |
Oct-25 | 1.856 | -6.9 |
Dec-25 | 1.770 | -15.5 |
Feb-26 | 1.752 | -17.3 |
Mar-26 | 1.730 | -19.5 |
Apr-26 | 1.731 | -19.5 |
Jun-26 | 1.740 | -18.5 |
USDCAD TECHS: Short-Term Gains Appear Corrective
- RES 4: 1.3920 High May 21
- RES 3: 1.3862 High May 29
- RES 2: 1.3798 High Jun 23
- RES 1: 1.3729/74 50-day EMA / High Jul 17
- PRICE: 1.3710 @ 08:09 BST Jul 28
- SUP 1: 1.3557 Low Jul 03
- SUP 2: 1.3540 Low Jun 16 and the bear trigger
- SUP 3: 1.3503 1.618 proj of the Feb 3 - 14 - Mar 4 price swing
- SUP 4: 1.3473 Low Oct 2 2024
Despite a recovery from last week’s lows, the trend needle in USDCAD continues to point south and short-term gains appear corrective. Resistance at 1.3728, the 50-day EMA, remains intact for now. A clear break of this average is required to highlight a possible stronger short-term reversal. For bears, sights are on key support at 1.3540, the Jun 16 low. Clearance of this level would confirm a resumption of the downtrend.
AUDUSD TECHS: Trend Needle Points North
- RES 4: 0.6700 76.4% retracement of the Sep 30 ‘24 - Apr 9 bear leg
- RES 3: 0.6688 High Nov 7 ‘24
- RES 2: 0.6677 0.764 proj of the Jun 23 - Jul 11 - 17 price swing
- RES 1: 0.6625 High Jul 24
- PRICE: 0.6552 @ 08:08 BST Jul 28
- SUP 1: 0.6544 20-day EMA
- SUP 2: 0.6505/6455 50-day EMA / Low Jul 17
- SUP 3: 0.6373 Low Jun 23 and a bear trigger
- SUP 4: 0.6357 Low May 12
Last week’s fresh trend highs in AUDUSD reinforce bullish conditions and the latest pullback is considered corrective. Gains have resulted in a print above key short-term resistance at 0.6595, the Jul 11 high and bull trigger. This marks a resumption of the uptrend and sights are on 0.6688, the Nov 7’ 24 high. Support to watch is at the 50-day EMA, at 0.6505. A clear break of this EMA would highlight a stronger reversal.
