CHILE: April CPI Inflation Due Tomorrow
- CPI inflation data for April will be published tomorrow, with analysts expecting the chained measure to show an uptick in the annual rate of inflation to 3.8% y/y, from 3.7%. In m/m terms, prices are expected to rise by 0.4% for a second month running.
- Scotiabank expects inflation to remain steady at 0.4% m/m, a still-too-high number. However, they note that roughly half of this increase will come from energy/fuels prices and they project that inflation ex. volatiles will make a strong move lower towards target, from 3.7% to 3.3% y/y thanks to easing services inflation. Overall, data are evolving in the right direction for the BCCh, but external factors remain a worrying factor as Governor Costa has highlighted.
- Meanwhile, JP Morgan forecasts +0.46%m/m for headline, driving the last 12-month change to 3.41% y/y. That would be consistent with the central bank decelerating the easing pace, cutting the policy rate by 50bp to 6% later this month. They note the more cautious communication of the central bank compounded with higher copper prices, driving USDCLP 5% lower since the latest monetary policy meeting.
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USDCAD TECHS: Has Pierced Key Short-Term Resistance
- RES 4: 1.3855 High Nov 10 2023
- RES 3: 1.3765 High Nov 22 2023
- RES 2: 1.3729 76.4% retracement of the Nov 1 - Dec 27 bear leg
- RES 1: 1.3661 High Nov 27 2023
- PRICE: 1.3581 @ 17:15 GMT Apr 5
- SUP 1: 1.3478/20 Low Apr 4 / Low Mar 8 and the bear trigger
- SUP 2: 1.3359 Low Jan 31 and key S/T support
- SUP 3: 1.3343 Low Jan 12
- SUP 4: 1.3288 Low Jan 5
A bull cycle in USDCAD remains in play and Friday’s initial gains reinforce this condition. The pair has pierced an important resistance and congestion at 1.3614, the Mar 19, 22, 25 and 29 high. A clear break of this hurdle would confirm a resumption of the uptrend that started late December last year. 1.3623, 61.8% of the Nov 1 - Dec 27 bear leg, has also been tested, a break would open 1.3661, the Nov 27 ‘23 high. 1.3478 is first support, the Apr 4 low.
AUDUSD TECHS: Remains Above The 50-Day EMA
- RES 4: 0.6729 High Jan 12
- RES 3: 0.6708 61.8% retracement of the Dec 28 - Feb 13 bear cycle
- RES 2: 0.6668 High Mar 8 and the bull trigger
- RES 1: 0.6635 High Mar 21
- PRICE: 0.6585 @ 17:14 GMT Apr 05
- SUP 1: 0.6503 Low Apr 3
- SUP 2: 0.6478 Low Mar 5
- SUP 3: 0.6443 Low Feb 13 and the bear trigger
- SUP 4: 0.6412 76.4% Fibonacci retracement for Oct - Dec upleg
The rally this week in AUDUSD has resulted in a break of resistance around the 50-day EMA. This potentially confirms the recent bout of weakness between Mar 8 - Apr 1 as corrective in nature. A continuation higher would open 0.6635, the Mar 21 high. For bears, a reversal lower and a break of support at 0.6478, the Mar 5 low, would instead reinstate a bearish theme. This would open the bear trigger at 0.6443, the Feb 13 low.
US TSYS: Back Near Post Jobs Low, Technical Support Holds
- Treasury futures gapped lower after higher than expected March employment data showed job surge of 303k vs. 214k est, 275k prior down revised to 270k.
- Balance of data: Private Payrolls (232k vs 170k est); Unemployment Rate (3.8% vs. 3.8% est vs. 3.9% prior), Average Hourly Earnings MoM (0.3% vs. 0.3% est), YoY (4.1% vs. 4.1% est), Labor Force Participation Rate (62.7% vs. 62.6% est).
- Jun'24 10Y futures gapped to a post-data low of 109-15 (-21; yield 4.3996% high) - near initial technical support of 109-09.5 (Apr 03 low). Futures dew short cover/position squaring support that saw TYM4 climb back to 109-30 in late morning trade before settling back near session lows after the Feb Consumer Credit came out lower than expected at $14.1B vs. $15B, prior down-revised to $17.684B from $19.495B.
- The strong jobs data sapped rate cut expectations in the near term: May 2024 at -5.7bp vs -9.8% pre-data w/ cumulative -1.4bp at 5.312%; June 2024 at -52.4% vs -59.6% earlier w/ cumulative rate cut -14.5bp at 5.181%. July'24 cumulative at -24.9bp vs -28.9bp earlier, Sep'24 cumulative -41.3bp vs. -45.1bp earlier.
- Slow start to next week, focus on CPI and March FOMC minutes on Wednesday, PPI on Thursday.
