AUDUSD TECHS: Approaching Key Short-Term Resistance
- RES 4: 0.6729/71 High Jan 12 / 3
- RES 3: 0.6663 High Jan 16
- RES 2: 0.6625 High Jan 30
- RES 1: 0.6595 High Feb 22 and key resistance
- PRICE: 0.6588 @ 07:58 GMT Mar 7
- SUP 1: 0.6478/6443 Low Mar 5 / Low Feb 13 and the bear trigger
- SUP 2: 0.6412 76.4% Fibonacci retracement for Oct - Dec upleg
- SUP 3: 0.6360 Low Nov 14
- SUP 4: 0.6339 Low Nov 10
AUDUSD is trading higher today. The recovery threatens a recent bearish theme and price is trading above the 50-day EMA. For now, the move higher is considered corrective, however, a break of 0.6595, the Feb 22 high, would strengthen a bullish theme and signal scope for a continuation higher. This would open 0.6625, the Jan 30 high. On the downside, initial key support has been defined at 0.6478, the Mar 5 low. A break would be bearish.
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GILTS: Opening calls
Gilt calls, range 98.18/98.22.
EQUITIES: Focus turns to the EU Cash open
Some focus on the Equity open today, with VGH4 making multiple attempts over the past 5-6 sessions at the 4700.00 level, printed a 4698.00 so far today:
- Cash calls: Estox 50: +0.55%, Dax: +0.39%, CAC: +0.49%, FTSE +0.91%, SMI +0.81%.
STIR: SONIA Futures A Little Firmer
The uptick from yesterday’s worst levels in wider core global FI markets has a dovish feedthrough into SONIA, leaving futures flat to +5.0, as the late reds and greens lead the move higher.
- BoE-dated OIS softens by 0.5-2.5bp, showing ~86bp of cuts for '24.
- A reminder that even though some snips of BoE chief economist Pill’s late Monday address read dovishly (supply side constraints limit GDP growth, no expectations for a meaningful pick-up in economic activity, while noting that interest rates would be at a restrictive level even if cuts took place) he stressed that he is not yet confident enough re: the inflationary outlook to be comfortable with cutting rates. He described any futures rate cuts as a “reward” for lowering inflation. All in, he sounded less hawkish than he did on Friday, noting that the outlook for monetary policy has “shifted,” albeit alongside flagging some worry for upside re: inflation.
- BRC like-for-like sales data was a touch firmer-than-expected, but the Y/Y print still registered the lowest level seen since ’22.
- The BoE’s quarterly APF report headlines a very slim local release docket on Tuesday. That shouldn’t be a needle mover. Elsewhere, the DMO will come to market in the long end of the gilt curve.
| BoE Meeting | SONIA BoE-Dated OIS (%) | Difference Vs. Current Effective SONIA Rate (bp) |
| Mar-24 | 5.175 | -1.4 |
| May-24 | 5.106 | -8.3 |
| Jun-24 | 4.991 | -19.8 |
| Aug-24 | 4.827 | -36.2 |
| Sep-24 | 4.677 | -51.2 |
| Nov-24 | 4.479 | -71.0 |
| Dec-24 | 4.332 | -85.7 |
