PERU: BCRP Interest Rate Decision Next Week
Sep-05 11:52
- With the domestic data calendar remaining clear today, focus ahead remains on the US payrolls report, coming up at 1330BST(0830ET). After that, attention turns to next week’s BCRP interest rate decision, which is due on Thursday.
- Despite the sharp fall of headline CPI inflation in August, a slight majority of analysts currently expect that central bank to keep the policy rate unchanged at 4.50% for a fourth consecutive meeting.
- Nonetheless, the benign inflation backdrop – with headline inflation falling to a seven-year low 1.11% y/y in August and core still below the 2% target – certainly skews risks towards a renewed cut next week. Regardless, forward guidance is likely to keep the door open to further easing ahead, and most analysts expect another rate cut to be delivered before year-end.
- USDPEN edged down by 0.2% to 3.5251 yesterday, but analysts note that the pair has been trading heavy around these levels, with USDPEN near five-year lows (3.5100)
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SONIA OPTIONS: SFIM6 97.00 Calls Lifted
Aug-06 11:49
SFIM6 97.00 calls paper paid 8.75 on 4K vs. 96.535.
US 10YR FUTURE TECHS: (U5) Holds Firm
Aug-06 11:49
- RES 4: 113-23 76.4% retracement of the Sep’24 - Jan’25 sell-off
- RES 3: 113-07 76.4% retracement of the Apr 7 - 11 sell-off
- RES 2: 112-23 High May 1
- RES 1: 112-15+ High Aug 5
- PRICE: 112-03+ @ 12:47 BST Aug 6
- SUP 1: 110-19+/08+ Low Jul 24 / Low Jul 14 & 16
- SUP 2: 110-03 76.4% retracement of the May 22 - Jul 1 bull leg
- SUP 3: 109-28 Low Jun 6 and 11
- SUP 4: 109.25 Low May 27
Treasury futures remain strong on the back of the post-NFP rally having cleared resistance into the bull trigger at 112-12+, the Jul 1 high. This opens the May 1 high for direction at 112-23, a multi-month high. Clearance here opens retracement levels layered between 113-07 and 113-23. On the downside, key support is 110-08+, the Jul 14 and 16 low. First support lies at 110-19+, the Jul 24 low.
EURIBOR OPTIONS: H6 Call Spread Buyer
Aug-06 11:42
ERH6 99.0/99.50 call spread, bought for 0.75 in 10k
- Dovish play looking for deeper ECB cuts to below 1%.
- ERH6 currently little changed on the session at 98.165.
