CHILE: Camara Swaps Edge Higher As Rate Cut Expectations Pushed Back
Sep-10 16:49
- Camara swap rates have edged higher today and the Chilean peso has outperformed after the central bank struck a more hawkish tone while holding rates yesterday. Front-end camara swap have risen 6-7bp, despite the decline in core UST yields today, while USDCLP is down by ~0.6% as expectations for near-term rate cuts have been pared. As noted earlier, many analysts now see the next rate cut coming in December.
- While presenting the third quarter monetary policy report to the Senate earlier, BCCh Governor Rosanna Costa said that core inflation is seen running higher over the next 12 months. It is now expected to end this year at 3.7%, as compared to 3.1% in the previous (June) IPoM, and 3.1% next year (vs. 3.0% previously). Costa said that wage increases, and consumer demand are driving core inflation.
- Meanwhile, headline inflation is expected to hit the 3% target in Q3 2026 and hover near that level after that. Costa said that the central bank’s inflation forecasts assume an appreciation of the peso ahead, according to reports on Bloomberg.
- For USDCLP, a bull cycle remains in play and recent weakness appears to be a correction. Nonetheless, today’s losses have narrowed the gap to key support at 961.55, the 50-day EMA. A clear break of this average is required to signal a stronger reversal. This would expose 946.49, the Jul 23 low.
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US STOCKS: Large Buy Program Helps Brief Uptick, Narrow Range Before Tue CPI
Aug-11 16:39
- ESU5 has recently seen a session high of 6431.50, just two points above overnight levels after a twenty-point climb before easing back towards 6425 (+0.2%).
- The move was helped by the largest buy program of the day (TICK index with 1435 names) at 1208ET, before easing a few points.
- Resistance remains at the bull trigger of 6468.50 (Jul 31 high) after which lies 6477.31 (1.618 proj of May 23 – Jun 11 – Jun 23 price swing). Support meanwhile is seen at 6239.50 (Aug 1 low).
- SPX gains are led by consumer discretionary (+0.65%, incl Tesla +4.9%), health care (+0.3%, Elil Lilly +3.0%) and IT (+0.3%, Microsoft +0.9%) whilst losses are led by energy (-0.5%), materials (-0.5%) and utilities (-0.3%).
- Tesla has applied for a license to supply electricity to British homes whilst Morgan Stanley analysts reiterated Tesla as overweight.
- E-mini comparison: Nasdaq 100 +0.3%, S&P 500 +0.2%, Russell 2000 +0.2% and Dow Jones -0.1%.
US: Trump 'See What Happens' w/China Pause, Zelenskyy Not Included In Putin Meet
Aug-11 15:47
President Donald Trump has told reporters at the White House, "we'll see what happens" with the China tariff and export control pause that expires at midnight tonight. Trump adds: "We've been dealing very nicely with China. They have tremendous tariffs," but "we'll see what happens". LIVESTREAM The prevailing view is that Trump will endorse a 90-day extension to the pause.
- Trump says on Friday's Alaska meeting with Russian President Vladimir Putin, "This is really a feel out meeting". He says: "Putin invited me to get involved... I believe he wants to get it over with." Adds: "Now, I've said that a few times and been disappointed," cites previous meetings that have been followed by Russian airstrikes.
- Trump: "I'm going in to speak with Vladimir Putin and I'm going to be telling him 'you've got to end it' ... I think we'll have constructive conversations." Trump's tone suggests that he is managing expectations of a major breakthrough in Alaska.
- Trump says that "immediately" after the meeting, he will call European leaders. Trump notes that he "gets along" with Ukrainian President Volodymyr Zelenskyy but disagrees with 'a lot of what he's done'. He notes that the next meeting will be either a bilateral between Zelenskyy and Putin or a trilateral with Trump's involvement.
- Trump's comments comes amid an extended press conference after his Washington DC emergency declaration. Earlier Trump suggested that other Democrat-run cities, including Los Angeles, New York, Baltimore, Chicago, Portland, and Oakland, could be subject to similar federal law enforcement operations. He says, "Democrats are weak on crime".
FED: US TSY 26W BILL AUCTION: HIGH 3.970%(ALLOT 27.15%)
Aug-11 15:32
- US TSY 26W BILL AUCTION: HIGH 3.970%(ALLOT 27.15%)
- US TSY 26W BILL AUCTION: DEALERS TAKE 19.63% OF COMPETITIVES
- US TSY 26W BILL AUCTION: DIRECTS TAKE 8.49% OF COMPETITIVES
- US TSY 26W BILL AUCTION: INDIRECTS TAKE 71.88% OF COMPETITIVES
- US TSY 26W BILL AUCTION: BID/CVR 3.21
