USDCAD TECHS: Bearish Outlook Pauses
Oct-12 20:00
- RES 4: 1.3862 High Mar 10 and a key resistance
- RES 3: 1.3857 2.0% 10-dma envelope
- RES 2: 1.3805 High Mar 24
- RES 1: 1.3786 High Oct 5
- PRICE: 1.3658 @ 16:38 BST Oct 12
- SUP 1: 1.3569 Low Oct 10
- SUP 2: 1.3514 50-day EMA
- SUP 3: 1.3417 Low Sep 29
- SUP 4: 1.3381 Low Sep 19 and a key support
USDCAD traded higher last week, but has faded since. Last week, price breached key resistance at 1.3695, the Sep 7 high. This highlights a bullish theme and a reversal of the recent bearish phase. The break also confirms a resumption of the uptrend that started mid-July. Trendline resistance - at 1.3699 and drawn from the Oct 13 ‘22 high, has also been cleared and is a bullish development. Support is at 1.3514, the 50-day EMA.
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US: Fixed Income Reaction To Recent US CPI Reports
Sep-12 19:51
2Y Treasuries have mostly rallied on recent CPI releases, regardless of whether they have been in line, missed consensus or even a small beat, but the sticking power for such front-end moves has been mixed.
US TSYS: Late Markets Roundup Bounds Inch Higher Ahead Wednesday CPI
Sep-12 19:34
- US FI markets are running steady to mixed, longer rates inching higher over the last hour, curves flatter (3M10Y -1.821 at -119.023, 2Y10Y -3.845 -74.309).
- Trade volume lighter than the week open, Dec'23 10Y futures under 860k at the moment. Corporate deal-tied hedging and pre-auction short sets ahead today's $35B 10Y Note re-open sale added pressure in 2s-10s in the first half.
- No data on the session, focus is on Wednesday's August CPI figures MoM (0.2%, 0.6%), YoY (3.2%, 3.6%), PPI on Thursday.
- Treasury futures holding narrow range after the $35B 10Y note auction reopen (91282CHT1) comes out in line: 4.289% high yield vs. 4.287% WI; 2.52x bid-to-cover vs. 2.56x prior. Indirect take-up slips to 66.31 vs. 72.20% prior; direct bidder take-up 19.92% from 18.3% prior; primary dealer take-up 13.77% vs. 9.5%.
- Technicals: The recent move lower signals the end of the corrective recovery between Aug 22 - Sep 1 and a key resistance has been defined at 111-12+, the Sep 1 high. Moving average studies continue to highlight a medium-term downtrend. An extension lower would signal scope for 109-09+, Aug 22 low and a bear trigger. A break of this level would strengthen a bearish theme.
US OUTLOOK/OPINION: GS See High 0.2 For Core CPI As Airfares Clash With Autos
Sep-12 19:27
- Goldman forecast US core CPI at 0.24% M/M (cons 0.2), reflecting a pullback in auto prices (used -3.1%, new -0.2%, mom sa) based on declines in used car auction prices and the further rebound in new car inventories and incentives.
- However, they expect a boost from residual seasonality in the transportation services categories, in particular for airlines (+6% mom sa; webfares also increased sequentially). CPI seasonal factors are likely overfitting to the rebound in prices in the aftermath of the pandemic lockdowns.
- They expect another gain in car insurance (+1.6%), as carriers continue to offset higher repair and replacement costs, and also see education prices rising 0.6% as tuitions for the new school year will begin flowing through and are likely to exceed the normal increases expected by the seasonal factors.
- Headline CPI seen at 0.63% M/M (3.58% Y/Y), reflecting higher energy (+5.8% M/M) and food (+0.3% M/M) prices.
