COMMODITIES: Bear Threat for WTI Futures Present Despite Moderate Recovery
WTI futures are firmer early Wednesday, however a bear threat remains present given the proximity to recent lows. Earlier this week, price pulled back from the recent high and has again traded below the 50-day EMA - at $71.62. Attention is on $70.20 (pierced), the Feb 6 low. A clear break of it would undermine a bullish theme and confirm a breach of the 50-day EMA. This would strengthen a bearish threat and open $67.75, the Dec 20 ‘24 low. Key S/T resistance has been defined at $74.06, the Feb 3 high. A move above this level would reinstate a bull theme. A bull cycle in Gold remains in play and the yellow metal continues to hold on to the bulk of its recent gains. Fresh highs once again confirm a resumption of the uptrend and maintain the bullish price sequence of higher highs and higher lows. Moving average studies are in a bull mode position too, highlighting a dominant uptrend. Sights are on the $2962.2, a Fibonacci projection. The first key support to watch is $2833.2, the 20-day EMA.
- WTI Crude up $0.52 or +0.72% at $72.37
- Natural Gas down $0.02 or -0.4% at $3.991
- Gold spot up $8.93 or +0.3% at $2945.17
- Copper up $1.5 or +0.32% at $465.65
- Silver up $0.11 or +0.32% at $32.9936
- Platinum up $1.12 or +0.11% at $987.22
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FOREX: CIBC Forecasting Just One BOJ Rate Hike in 2025, Recommend Long USDJPY
- CIBC are expecting the BOJ to hike this week, however, given most of the move is already priced in, they believe a hike would have minimal impact. Furthermore, CIBC expect the tone of the meeting will be dovish, which would dampen market enthusiasm of pricing in more hikes to come and they only expect the BoJ to deliver one hike this year.
- With this said, and counter to intuition, CIBC like positioning for USD/JPY appreciation ahead of the hike, and have recommended a tactical long at 156.00, with a target of 159.50 and a stop at 154.00
- Bolstering the trade, CIBC highlight that the Fed is more open to pausing, and with the US data not weak enough to warrant immediate cuts, a slower-than-anticipated pace for the Fed should dispel (or at least limit) any anticipation of rapid central bank divergence between US and Japan.
- Additionally, still attractive carry and a lower correlation to deteriorating risk sentiment should be supportive of the trade.
BUNDS: Block and Swap trades
Bund block trade, suggest seller.
- RXH5 ~2.12k at 131.67.
Bund Swap related trade suggest Payer:
- RXH5 1.84k at 131.72.
STIR: CORRECT: Some SOFR Spread Flow In Early London Trade
Although U.S. liquidity is set to be limited by the MLK holiday, early London trade has seen some spread flow.in SFRU5/M6, with paper paying -2.0 on 11.2K. That may have been triggered by activity in SFRM5/M6, which saw paper pay -9.0 on 2.4K at the same time.
