SPAIN: Catalan Separatists Issue Demands As Vox Falters In Election
The hardline Catalan separatist party, Junts, has issued a set of demands to Spanish Prime Minister Pedro Sancho after neither the ruling centre-right PSOE, nor the center right People's Party (PP) secured the votes to form a government in yesterday's election.
- According to Reuters the Junts said, "we need to use the opportunity given by the election to achieve our goal of Catalan independence... we will see what [Sanchez] is ready to do and which guarantees he would offer in a possible investiture vote."
- "The socialists are the ones who need to make concessions if they want their support… political amnesty and a referendum on independence are our main demands."
- Sanchez has alternative, but challenging, pathways to a majority, including winning the support of left-wing separatist party Esquerra Republicana de Catalunya (ERC) but may also require the support of Junts who haven't supported Sanchez in the past four years.
- Any move by Sanchez to secure the support of the Junts risks a reemergence of the political crisis of 2017 when Carles Puigdemont led a unsanctioned bid for Catalan independence.
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USDCAD TECHS: Trend Needle Points South
- RES 4: 1.3419 50-day EMA
- RES 3: 1.3355 High Jun 15
- RES 2: 1.3324 20-day EMA
- RES 1: 1.3270 High Jun 20
- PRICE: 1.3198 @ 16:44 BST Jun 23
- SUP 1: 1.3139 Low Jun 22
- SUP 2: 1.2992 50.0% retracement of the Jun - Oct 2022 bull rally
- SUP 3: 1.2954 Low Sep 13 2022
- SUP 4: 1.2895 Low Aug 25
USDCAD is trading closer to this week’s lows despite a modest bounce Friday. The downtrend remains intact. Fresh trend lows this week strengthens bearish conditions and maintains the price sequence of lower lows and lower highs. Moving average studies are in a bear-mode position, highlighting current sentiment. Scope is seen for a move towards 1.2992, a Fibonacci retracement. On the upside, firm resistance is seen at 1.3324, the 20-day EMA.
AUDUSD TECHS: Pullback Extends
- RES 4: 0.6993 76.4% retracement of the Feb - May downleg
- RES 3: 0.6921 High Feb 20
- RES 2: 0.6857/6900 High Jun 20 / 16 and key resistance
- RES 1: 0.0.6737/6806 20-day EMA / High Jun 27
- PRICE: 0.6682 @ 16:35 BST Jun 23
- SUP 1: 0.6663 Low Jun 23
- SUP 2: 0.6627 61.8% retracement of the May 31 - Jun 16 rally
- SUP 3: 0.6610 Low Jun 6
- SUP 4: 0.6562 76.4% retracement of the May 31 - Jun 16 rally
This week’s pullback in AUDUSD has resulted in a break of the 20- and 50-day EMA values. The break of the 50-day average, at 0.6704, suggests potential for a deeper retracement. The next support lies at 0.6627, a Fibonacci retracement point. A break of this level would strengthen bearish conditions. Initial firm resistance is at 0.6806, the Jun 27 high. Clearance of this level would ease a bearish threat. Key resistance is 0.6900, Jun 16 high.
US TSYS: US PMIs Follow Weaker EGB Metric's Lead
- Treasury futures trading firmer after the bell, but holding to narrow range since late morning after scaling off from post-data highs: TYU3 currently 113-01.5 +10 vs. 113-15.5 high; 2s10s curve at -101.173 after extending inversion to -103.544 low vs. March' 40Y low around -110.0.
- Fast two-way trade noted earlier as front month Treasury futures extended support then reversed after S&P Global US PMI data comes out lower than expected: Manufacturing PMI (46.3 vs. 48.5 est); Services PMI (54.1 vs. 54.0 est) Composite PMI (53.0 vs. 53.5 est).
- Treasury futures tracked higher EGBs overnight after lower than projected European PMIs overnight (France servicer PMI 48 vs 52.1 est; Germany mfg PMI 41.0 vs. 43.5 est; EU and UK softer as well).
- Cooler inflation metrics slightly tempered projected US rate hike at one of the next three meetings, though Nov'23 implied rate still fully pricing in a hike. First full 25bp rate CUT has pushed out to May 2024.
- Atlanta Fed Pres Bostic (non-voter in 2023) comments at Bank event with CFOs contributing to latest move: NOT SEEING ELEMENTS OF RISK APPEARING IN ECONOMY, Bbg.
- Meanwhile, SF Fed Pres Daly could be one of the 9 FOMC members in the two-hike camp for 2023, telling Reuters that 50bp of further tightening this year is "a very reasonable projection at this point...but no decision, for me, has been made." Echoing Chair Powell's comments the past two weeks, Daly said "it is, in my judgment, prudent policy... to slow the pace of policy as you near the destination."
