CHILE: BCCh Expected To Extend Rate Pause Next Week
Apr-25 11:21
- USDCLP closed 1% lower yesterday at 934, amid a pick-up in copper prices and broad dollar weakness, keeping the pair near recent MTD lows. The recent breach of the 50-day EMA signals scope for a deeper retracement and opens 914.00, the Mar 18 low, although a firmer greenback and pullback in copper prices today may put the peso on the backfoot at the open. Initial resistance is at the 50-day EMA, at 955.87.
- No macro data are due today, with the next scheduled release being March unemployment on Tuesday, which comes just ahead of the central bank’s April monetary policy meeting. Month-end IP and retail sales stats also cross next week, as well as March economic activity.
- Analysts widely expect the BCCh to keep its policy rate unchanged at 5.0% for a third consecutive meeting on Tuesday, amid heightened external uncertainty and persistent inflation pressures. Mounting concerns about the growth outlook may bring forward the next rate cut, however, and latest survey data now point to 50bp of easing in H2 (vs. 25bp expected previously).
- Separately, Codelco is expected to report Q1 earnings around 1700BST / 1200ET today.
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US DATA: Mortgage Applications Track Sideways With Rates
Mar-26 11:15
- MBA composite mortgage applications drifted 2% lower last week (sa), building on the -6% the week prior that chipped away at a 34% two-week increase before that.
- Refis have led the modest pullback (-5% after -13% following 59%) whilst new purchase applications have largely paused (0.7% after 0.1% following 17%).
- The 30Y conforming rate inched 1bp lower to 6.71%, broadly consolidating around the 6.7% level for the past four weeks now having eased from a recent high of 7.09% in early January. It's a move that stoked a relatively modest uplift in activity when looking at broader trends.
SWEDEN: Government Aims To Increase Defence Spending To 3.5% GDP By 2030
Mar-26 11:13
Headlines crossing from the Swedish PM on Reuters:
- SWEDEN PRIME MINISTER: MUST RAISE DEFENCE SPENDING MORE THAN PREVIOUSLY PLANNED
- SWEDEN PRIME MINISTER: PROVISIONALLY PLANS TO RAISE DEFENCE SPENDING TO 3.5% OF GDP BY 2030
- SWEDEN PRIME MINISTER: WE ARE LOOKING AT A LOAN-FINANCED DEFENCE INVESTMENT UNTIL 2035, TOTALLING ABOUT SEK 300 BILLION
In the 2025 Budget Bill presented in September last year, the Government had committed to defence spending totalling 2.4% in 2025, rising to 2.6% in 2028.
BUNDS: Some selling flows are going through
Mar-26 11:05
- Some selling flows are going through, all orders related as oppose to new news headline, Bund has seen around ~60k in the past 25 minutes of cumulative Volume, latest saw 3x 5k clips.
- US Tnotes, is also sold in 6k. Noted Yesterday that a break through the 110.12+/110.10 area would have suggested some potential extension up to the 4.40% Yield level.
- While 110.12+ was broken, the 110.10/110.08 will now be the initial area to watch, TYM5 printed a 110.10 low Yesterday.
