USDCAD TECHS: Breaches The Bull Trigger
Sep-28 20:10
* RES 4: 1.4111 High Apr 10 * RES 3: 1.4019 38.2% retracement of the Feb 3 - Jun 16 bear leg * RES 2...
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LOOK AHEAD: Payrolls Headlines US Data For The Week
Aug-29 20:00
- Friday’s nonfarm payrolls report for August is going to be watched extremely closely after last month’s weak July report has subsequently set the tone for price action. The Fed is highly sensitive to downside growth surprises in the labor market.
- Last month’s report was particularly notable for its huge downward revisions of -258k, the largest in at least forty-five years when excluding April 2020 of the pandemic, leaving a picture of a sharp cooling in labor demand.
- President Trump used the large revisions as justification for the highly unusual decision to fire BLS Commissioner McEntarfer shortly afterwards.
- Bloomberg consensus currently looks for nonfarm payrolls growth of 75k, very similar to the 73k in July, but with those two-month revisions also in focus.
- The unemployment rate should be viewed in equal importance to payrolls growth amidst the sharp decline in labor supply that has been seen concurrently, keeping the labor market in greater balance than would otherwise be the case.
- The unemployment rate is seen at 4.3% in August after rising to what was technically a cycle high of 4.25% in July but with the rate tracking between 4-4.25% ever since a high of 4.22% back in July last year. Whilst now outdated, the median FOMC forecast from the June SEP had the unemployment rate increasing to an average 4.5% in 4Q25 as part of its profile with 50bp of cuts to year end.
US TSYS: Late Buying on Late SF Fed Daly Recalibration Comment
Aug-29 19:43
- Treasuries are still mostly weaker after the bell - but swinging off late lows following late comments on LinkedIn from SF Fed Daly, that tariff-tied inflation is likely a one-off, that inflation/labor market are in tension, and lastly that "it will soon be time to recalibrate policy"
- Tsy Dec'25 10Y futures currently trades -.5 at 112-18.5 vs. 112-20.5 morning high, initial technical resistance above at 112-28.5 (2.000 proj of the Jul 15 - 22 - 28 price swing).
- Curves mildly steeper: 2s10s +3.597 at 60.622, 5s30s +4.177 122.498.
- US$ remains stable near modest lows (BBDXY -.39 at 1200.81.)
LOOK AHEAD: Eurozone Final PMIs After Further Improvement In Flash
Aug-29 19:30
- The Eurozone final PMI surveys for August are due for manufacturing on Monday and services on Wednesday.
- The flash PMIs were surprisingly robust as the composite increased to 51.1 for another 0.2pt improvement, up from the 50.4 averaged in 1H25 and its highest since May 2024.
- Drivers were mixed however, with manufacturing leading the monthly improvement to 50.5 whilst services cooled to 50.7 as the two closed what has been sizeable divergence.
- This week's final readings should confirm that countries other than Germany and France have still been outperforming but by less than previous months.
- Since the flash PMI release, the European Commission's economic confidence index was softer than expected in August as it shifted back close to levels averaged in 1H25 and is comfortably below its long-term average.
