EMERGING MARKETS: CEEMEA FX Price Signal Summary - USDTRY Path Of Least Resistance Remains Up
- The USDZAR downtrend remains intact and last week’s breach of 16.7815, the Jan 4 low, confirmed a resumption of the trend. This paves the way for a move towards the 16.50 handle next. Moving average studies are in a bear mode position and this highlights a dominant bear cycle. Short-term gains are considered corrective. Firm resistance to watch is at 17.4343, the Jan 6 high.
- The primary trend direction in USDTRY is unchanged and remains up. The 18.7000 handle has been breached and the focus is on the 18.8000 handle next and 18.9000 further out. The 20-day EMA, at 18.7322, marks the first support.
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US TSYS: Yield Curves Bounce Back to Pre-FOMC Levels, 2Y Rally
Yield curves broadly steeper after the bell, short end lead rally off morning lows, 2YY at 4.1888% -.0475 after tapping 4.1531 low, 2s10s +8.518 at -70.892 -- back to pre-FOMC levels
- Market's way of discounting the week's hawkish Fed and ECB policy speak and forward guidance. Equities NOT taking a risk-on/dovish pricing view w/ SPX eminis -50.0 at 3877.25 (after bouncing off key support of 3855.13 50.0% - retracement of the Oct 13 - Dec 13 uptrend).
- Tsys bounced off lows following PMI data: The Fed will be encouraged that the crucial theme of weakening demand in the economy - leading to more modest inflation - played out further in this morning's Nov prelim US PMIs.
- The activity data overall remain contractionary, and are deteriorating: Composite at 44.6, a 4-month low), Services at 44.4 (4-month low), and Manufacturing at 47.4. (a 31-month low).
- Demand is weakening, as evidenced by the fastest decline in new orders since May 2020 with "pressure on purchasing power among customers and company balance sheets".
- Fed speak: little market react from SF Fed Daly riffing on familiar theme: Fed Still Has a ‘Long Way’ to Go to Defeat Inflation. Cleveland Fed Mester: "leaving inflation at these levels for long is costly".
US STOCKS: Late Equity Roundup: Key Support Held
Stocks weaker but well off key support of 3855.13 50.0% (retracement of the Oct 13 - Dec 13 uptrend) to 3882.50 in late trade. Real Estate, Consumer Discretionary and Utilities sectors continued to weigh on SPX eminis, currently trade -41.25 (-1.05%) at 3886.75; DJIA -268.49 (-0.81%) at 32941.94; Nasdaq -89.6 (-0.8%) at 10721.73.
- SPX leading/lagging sectors: Real Estate (-3.21%) with Prologis (PLD, Ventas (VTR), Welltower (WELL) and Iron Mountain (IRM) shares all trading more that 5% lower; Consumer Discretionary (-1.89%) weighed by auto makers: Ford -6.49%, Tesla -4.44%, GM -3.62%; Utilities (-1.63%) saw water services underperforming
- Leaders: Communication Services (-0.07%) with META, Netflixx and Fox bouncing from midweek selling, Materials (-0.41%) and Consumer Staples (-0.53%) followed.
- Dow Industrials Leaders/Laggers: United Health (UNH) off lows at 521.48 (-6.20), Home Depot (HD) -5.86 at 321.74, American Express (AXP) -5.0 at 145.22.
- Leaders: Caterpillar (CAT) +1.29 at 231.95, Amgen (AMGN) +30.0 at 266.44, Dow Ind -0.16 at 49.37.
US: FED Reverse Repo Operation
NY Fed reverse repo usage climbs to $2,126.540B w/ 100 counterparties vs. $2,123.995B in the prior session. Prior record high stands at $2,425.910B on Friday, September 30.
NY Federal Reserve/MNI
