BUNDS: BoE and The Fed are at the forefront
- There's very little changed in Bund going into the European session, overall it is trading closer to Yesterday's wide 164 ticks mid range.
- The German IP was a miss, but this had very little impact on the release, just a tiny 10 ticks turnaround.
- Nonetheless, the contract sees better demand post Cash open, lifted in 4k cumulative volume.
- Small resistance moves down to 131.92, followed by 132.22 (Yesterday's high).
- Support moves up to 131.15, followed by 130.58 (Yesterday's low).
- Today will see Services PMIs, but these will be final readings for France, Germany, EU and US, so main focus will be on the BoE, and especially the Fed, given Donald Trump's win Yesterday.
- SUPPLY: Early focus in Europe will be on Supply, Spain 5s, 30s plus linker, France 10s, 20s, 30s.
- SPEAKERS: ECB Stournaras (x3), Schnabel, Elderson, Escriva, Knot, Lane, BoE Presser, Fed Powell.
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SILVER TECHS: Bullish Outlook
- RES 4: $33.738 - 1.618 proj of the Aug 8 - 26 - Sep 6 price swing
- RES 3: $33.297 - 1.50 proj of the Aug 8 - 26 - Sep 6 price swing
- RES 2: $33.000 - Round number resistance
- RES 1: $32.963 - High Sep 26
- PRICE: $31.170 @ 08:10 BST Oct 8
- SUP 1: $31.043/30.131 - 20- and 50-day EMA values
- SUP 2: $28.535 - Low Sep 12
- SUP 3: $27.686 - Low Sep 6 and a key support
- SUP 4: $27.180 - Low Aug 14
Bullish conditions in Silver remain intact and short-term weakness is considered corrective. The metal has recently traded through resistance at $31.754, the Jul 11 high. Note too that price has also pierced $32.518, the May 20 high and a key resistance. A clear break of this hurdle would confirm a resumption of the medium-term uptrend and open $33.297, a Fibonacci projection. Firm support lies at $30.131, the 50-day EMA.
STIR: Euribor Futures Off Overnight Lows, October ECB Cut Pricing Little Changed
Euribor futures are flat to +3.0 ticks through the blues, still well off last week's highs following Friday's stronger-than-expected US labour market report.
- ECB-dated OIS price 23bps of cuts through next week’s meeting and 50bps through year-end, while 128bps of implied cuts are priced through the June ’25 meeting.
- This morning, ECB Executive Board member Elderson, who rarely comments on monetary policy, said the ECB will need to “carefully assess” whether downside growth risks have implications for the bank’s inflation outlook.
- German August IP was stronger than expected but wasn’t a major market mover.
- ECB’s Centeno and Nagel are scheduled to speak today.
| Meeting Date | ESTR ECB-Dated OIS (%) | Difference Vs. Current Effective ESTR Rate (bp) |
| Oct-24 | 3.186 | -22.7 |
| Dec-24 | 2.910 | -50.3 |
| Jan-25 | 2.689 | -72.4 |
| Mar-25 | 2.438 | -97.5 |
| Apr-25 | 2.285 | -112.9 |
| Jun-25 | 2.131 | -128.2 |
| Jul-25 | 2.052 | -136.1 |
| Sep-25 | 1.975 | -143.8 |
| Source: MNI/Bloomberg. | ||
USDCAD TECHS: Testing Key Resistance
- RES 4: 1.3791 High Aug 7
- RES 3: 1.3745 61.8% retracement of the Aug 5 - Sep 25 bear leg
- RES 2: 1.3683 50.0% retracement of the Aug 5 - Sep 25 bear leg
- RES 1: 1.3647 High Sep 19 and key resistance
- PRICE: 1.3645 @ 08:07 BST Oct 8
- SUP 1: 1.3547 20-day EMA
- SUP 2: 1.3473/3420 Low Oct 2 / Low Sep 25 and the bear trigger
- SUP 3: 1.3413 Low Feb 9
- SUP 4: 1.3358 76.4% retracement of the Dec 27 ‘23 - Aug 5 bull run
The trend condition in USDCAD remains bearish and the latest recovery appears to be a correction - for now. However, the pair has traded through the 20- and 50-day EMAs and is holding on to its latest gains. This has exposed 1.3647, the Sep 19 high and a key resistance. Clearance of this level would signal a possible reversal. Initial firm support to watch is 1.3547, the 20-day EMA. A breach would highlight a potential reversal.
