USDCAD TECHS: Bear Mode Condition Intact
- RES 4: 1.4415 High Apr 1
- RES 3: 1.4296 High Apr 7
- RES 2: 1.4142 50-day EMA
- RES 1: 1.3906/4000 High Apr 17 / 20-day EMA
- PRICE: 1.3858 @ 16:07 BST Apr 25
- SUP 1: 1.3781 Low Apr 21
- SUP 2: 1.3744 76.4% retracement of Sep 25 ‘24 - Feb 3 bull run
- SUP 3: 1.3696 Low Oct 10 2024
- SUP 4: 1.3643 Low Oct 9 ‘24
The trend outlook in USDCAD is unchanged, it remains bearish. A fresh cycle low on Monday highlights a resumption of the downtrend and signals scope for a continuation near-term. Potential is seen for a move towards 1.3744, a Fibonacci retracement. Moving average studies are in a bear -mode position, highlighting a dominant downtrend. First resistance to watch is 1.4000, the 20-day EMA.
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EURJPY TECHS: Resistance Remains Exposed
- RES 4: 165.43 High Nov 8
- RES 3: 164.90 High Dec 30 ‘24 and a key medium-term resistance
- RES 2: 164.55 High Jan 7
- RES 1: 164.19 High Mar 18 and the bull trigger
- PRICE: 162.48 @ 16:50 GMT Mar 26
- SUP 1: 160.74 Low Mar 20
- SUP 2: 160.43 50-day EMA
- SUP 3: 158.90 Low Mar 10
- SUP 4: 158.00 Round number support
The trend condition in EURJPY remains bullish and a recent sell-off appears corrective. This has allowed an overbought trend condition to unwind. Short-term pivot support to watch is 160.43, the 50-day EMA. A break of this level would signal potential for a deeper retracement. Sights are on 164.08, the Jan 24 high. It has been pierced, a clear break of this hurdle would strengthen a bullish condition and open 164.90, the Dec 30 ‘24 high.
STIR: Near-Term Cut Odds Remain Remote As Fed Presidents Eye Patience
Despite a broader risk-off move in equities/the dollar - largely on an imminent announcement of auto tariffs this afternoon by President Trump - Fed funds futures are little changed.
- A May cut remains less than a 20% probability, while 2025 cuts were steady at an implied 63bp. 2 cuts remain the base case, with the first fully priced by July, and the second by October.
- Today's FOMC commentary reiterated that the Fed would likely be on hold for a prolonged period until there is greater clarity over government policy shifts: St Louis's Musalem called for the maintenance of a "patient approach", while Minneapolis's Kashkari said the outlook behooved a hold "for an extended period of time until we get clarity".
- Focus turns to Thursday's largely "hard" data, particularly what's expected to be a large (if idiosyncratically-driven) trade deficit for February, as well as jobless claims and final reading of Q4 GDP.
| Meeting | Current FF Implieds (%), LH | Cumulative Change From Current Rate (bp) | Incremental Chg (bp) | Yest (Mar 25) | Chg Since Then (bp) |
| May 07 2025 | 4.28 | -4.8 | -4.8 | 4.29 | -0.7 |
| Jun 18 2025 | 4.15 | -18.3 | -13.5 | 4.15 | -0.4 |
| Jul 30 2025 | 4.03 | -29.8 | -11.5 | 4.04 | -0.5 |
| Sep 17 2025 | 3.89 | -44.5 | -14.7 | 3.90 | -1.1 |
| Oct 29 2025 | 3.81 | -51.7 | -7.2 | 3.82 | -0.2 |
| Dec 10 2025 | 3.70 | -62.8 | -11.1 | 3.71 | -0.4 |
EUROZONE ISSUANCE: MEF Releases Q2 Issuance Program, New 7Y / 10Y Issues Eyed
Italy's MEF releases their Q2 issuance update (PDF here). We will cover in more depth Thursday, but some highlights:
- "Considering the current cash balance and the already announced issues settling by March 31st, equal to 25 billion, with respect to the end of the year target, from April 1 st to December 31st, MEF estimates a gross issuance volume of medium-long term government bonds for a total amount in the area of EUR 225-245 billion. Given the redemptions, this implies an expected net issuance volume of around EUR 55-75 billion for the same period. Therefore, at the end of February 2025, the rate of progress in the funding activity for the current year stood at 24%. The latter rate rises to 32% if issuances made and those already announced settling in the month of March are included."
Expected new issues in the quarter:
- E10B of 7Y BTP (Jul-32)
- E10B of 10Y BTP (Oct-35)
Expected re-opens:
- BTP Short Term 2.55% Feb-27
- BTP 2.65% Jun-28
- BTP 2.95% Jul-30
- BTP 3.65% Aug-35
