FOREX: AUD Firms, JPY Slips on China Policy Tweak
- The greenback is slightly softer, with the JPY similarly backtracking after risk sentiment saw support on the back of China headlines alongside the European open. China's Politburo meeting ended with a firmer commitment to easing and propping up the economy next year, with the central bank also making a major dovish shift to monetary policy for the first time since 2011.
- As such, equity markets are firmer in Europe, however US futures are yet to receive the full benefits, pointing to a modestly lower open on Wall Street later today. AUD and NZD are the session's best performers in the interim.
- News from China this morning has provided a boost to risk sentiment across FX543wf markets, with AUD (+0.88) leading the G10 charge. We noted the monetary policy stance tweak and fiscal language used today reduces the odds of a meaningful move lower in the country's GDP growth target for '25. Despite AUDUSD’s advance, trend conditions remain bearish and resistance is at 0.6497, the 20-day EMA. This average has capped gains well in recent weeks.
- Focus for the remainder of Monday trade turns to the NY Fed's 1-year inflation expectations print as well as an appearance from BoE's Ramsden. The Fed have entered the their pre-meeting media blackout - leaving the speaker schedule more quiet than usual.
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JGB TECHS: (Z4) Bounce Reverses
- RES 3: 149.55 - High Mar 22 (cont)
- RES 2: 147.74 - High Jan 15 and bull trigger (cont)
- RES 1: 146.53 - High Aug 6
- PRICE: 143.70 @ 16:14 GMT Nov 08
- SUP 1: 143.39 - Low Nov 07
- SUP 2: 142.23 - Low Jul 02
- SUP 3: 140.21 - 1.236 proj of Mar 22 - Nov 1 ‘23 - Jan 15 price swing
Prices fell further Thursday, extending the recent pullback. The return lower at the start of this week has culminated in a break of 143.57, marking both the Jul 17 high on the continuation contract as well as the Oct 22 low. For now, the 50-dma tops out at 144.32, and marks first resistance. A continuation higher would open 146.53, the Aug 6 high (cont) and a bull trigger.
US TSY FUTURES: BLOCK: Late 2Y/10Y Ultra-Bond Flattener
- Flattener crossed late Friday at 1645:30ET, DV01 $322,000
- -8,900 TUZ4 102-23.88, sell through 102-24.38 post time bid vs.
- +3,700 UXYZ4 113-16, post time offer
USDCAD TECHS: Trend Needle Points North
- RES 4: 1.4179 2.0% 10-dma envelope
- RES 3: 1.4000 Round number resistance
- RES 2: 1.3977 High Oct 13 and a key M/T resistance
- RES 1: 1.3959 High Nov 1 / 6
- PRICE: 1.3910 @ 16:29 GMT Nov 8
- SUP 1: 1.3836/22 20-day EMA and a key S/T support / Low Nov 6
- SUP 2: 1.3744 50-day EMA
- SUP 3: 1.3611 Low Oct 8
- SUP 4: 1.3567 Low Oct 7
USDCAD reversed course Wednesday and recovered from Tuesday's low. The trend outlook is unchanged, it remains bullish. Attention is the key resistance at 1.3946, the Aug 5 high. This hurdle has been pierced, a clear break would strengthen the uptrend and open 1.3977, the Oct 13 high and a key medium-term resistance point. Initial firm support to watch lies at 1.3836, the 20-day EMA.
