PERU: BCRP Expected To Pause Easing Cycle
Dec-12 12:24
- The central bank is expected to stay on hold at 5.0% at 2300GMT(1800ET), having signalled last month that a pause in the easing cycle is likely. The recent up-tick in CPI inflation also gives a reason to pause, while Governor Velarde said that the increase in public spending is limiting the pace at which the central bank can cut interest rates.
- The central bank is expected to keep the door open to further rate cuts ahead, however, and some analysts still see scope for a cut today, amid recent outperformance of the Peruvian sol.
- The full MNI preview with analyst views is here.
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FOREX: Single Currency Weakness in Focus, EURGBP Holds 0.8300 Retest
Nov-12 12:24
- As EURUSD continues to edge towards the 2024 lows at 1.0601, single currency weakness is also prominent in the crosses with the likes of EURCHF sliding to a near three low and EURGBP resuming its weakening trend having retested the 0.8300 handle earlier today.
- For EURCHF, we have breached a short-term trendline, drawn from the August lows, and the next notable levels are at 0.9333 and 0.9307, the October and September lows respectively.
- For EURGBP, we noted the weekly close below the 0.8300 handle as potentially pivotal for the cross, and it is noteworthy that we had a retest of this level over the UK data earlier today, printing a high of 0.8302.
- Since then, we have reverted lower and the focus will be on yesterday’s low at 0.8260, ahead of 0.8250, the Apr 14 ’22 low. Below here another major support resides at 0.8203, the Mar 7 ‘22 low.
CROSS ASSET: A new low for US Treasuries, USDJPY breaks session high.
Nov-12 12:12
- US Treasuries are seeing a small pickup in Volumes as they push through new intraday low, latest order flow sees 4k sold in TY, 1k in USA, all cumulative volumes.
- On this side of the Pond, BTP in 2k and OAT in 1k.
- The resistance noted in Bund at 132.73 has held, as well as the 2.30% Yield level, and the German contract, similar to Yesterday, is seeing a two way price action.
- Initial support in US TYZ4 comes at 109.14.
- The USDJPY breaks through the high, taking its cue from the move higher in US Yield, but initial resistance is further out, up to 154.71.
OUTLOOK: Price Signal Summary - Bunds Pierce Resistance
Nov-12 12:08
- In the FI space, Bund futures traded higher Monday and the contract remains above its recent lows. Gains are - for now - considered corrective. The trend direction is down and last Wednesday’s break to a fresh cycle low reinforces this theme. The 131.00 handle has been cleared, signalling potential for 129.99, the 1.236 projection of the Oct 1 - 10 -16 price swing. Initial key resistance is at 132.52, the 20-day EMA (pierced). A clear break of it would be seen as an early bullish development. This would expose 133.10, the 50-day EMA.
- A bearish trend condition in Gilt futures remains intact and short-term gains are considered corrective. The contract has recently breached 92.99, a 2.00 projection of the Sep 17 - 30 - Oct 1 price swing. This signals scope for an extension towards 92.23, the 2.236 projection. The Oct 30 high of 96.65, is seen as a key short-term resistance where a break is required to highlight a possible base. Initial resistance is 94.73, Nov 1 high.
