STIR: Apparent Net Long Setting In SFRM5 Bucks Wider Wednesday Theme

• In FX, short-term weakness in EURUSD is considered corrective and the trend structure remains bullish. Moving average studies are in a bull-mode position signalling a dominant uptrend, and the latest move down is allowing an overbought condition to unwind. A resumption of gains would open 1.1608 next, the Nov 9 2021 high. Key short-term support is unchanged at the 20-day EMA, at 1.1236. A break of this average would signal scope for a deeper retracement.
• Bullish trend conditions in GBPUSD remain intact and Monday’s positive start to the week reinforces current conditions. A fresh cycle high yesterday highlights a resumption of the uptrend and maintains the price sequence of higher highs and higher lows. Moving average studies are in a bull-mode position too, signalling a dominant uptrend. Sights are on 1.3510, the 1.236 projection of the Feb 28 - Apr 3 - 7 price swing. Support to watch lies at 1.3180, the 20-day EMA.
• The recovery that started Apr 22 in USDJPY is considered corrective. Resistance to watch is 144.24, the 20-day EMA. A clear break of this level would signal scope for a stronger recovery. Resistance at the 50-day EMA, is at 147.05. Moving average studies are in a bear-mode position highlighting a dominant downtrend. A resumption of the trend would open 139.79 next, a 1.382 projection of the Feb 12 - Mar 11 - 28 price swing.

With almost every riding (seat) declared, PM Mark Carney and his centre-left Liberal party will, in the days ahead, be looking to secure either a coalition or a confidence-and-supply agreement with opposition parties that will enable the gov't to command a majority in the House of Commons. 

• The default option may be to work with the left-wing New Democratic Party (NDP). However, with the NDP set to win just seven seats, this would only put the gov't three seats over the 172 majority threshold. The other option would be the regionalist/separatist Bloc Quebecois. BQ's (likely) 23 seats would ensure the passage of legislation. The Bloc could demand concessions in the form of greater federal funding for Quebec or further regional devolution in exchange for support.
• The event that spurred the Liberals' recovery - US President Donald Trump's aggressive stance on tariffs and sovereignty - will likely ensure requisite parliamentary support for Carney when it comes to facing down the US. Any party perceived to be putting its own interests ahead of the country on trade could face a further public backlash.
• Earlier this morning, Public Safety Minister David McGuinty told MNI that "there’s an opportunity here to retool and reboot the economy. There’s some good ideas on all sides of the House, we’ve got to get them and then we’ve got to implement them.” For full article, see "MNI INTERVIEW: Carney To Work With Opposition, BQ- Minister' or contact sales@marketnews.com for access. 

• Fed funds implied rates are 0-1.5bp higher today for 2025 meetings, aided by the WSJ reporting after the close yesterday that Trump is expected to soften the impact of auto tariffs.
• It modestly pares yesterday’s rally with help from some further recovery in equity futures.
• Cumulative cuts from 4.33% effective: 2.5bp May, 17bp Jun, 37.5bp Jul, 57.5bp Sep and 91.5bp Dec.
• In SOFR futures, the terminal yield remains in the U6 (3.06%), with the contract currently leading the day’s losses at -4.5. At 96.940, it’s off yesterday’s high of 96.990 after clearance of 96.97 (Apr 21 high) saw highs since levels prior to the 90-day tariff pause announcement on Apr 9.
• Today sees advance trade data for March at 0830ET, with Bessent set to speak at the same time, before JOLTS and the Conference Board consumer survey at 1000ET.
• There are also multiple earnings releases still to come today plus potential for Trump headlines in reaction to the WSJ report on autos yesterday plus Politico today reporting Amazon as being set to display the impact of Trump tariffs on each product.