EMERGING MARKETS: CEEMEA FX Price Signal Summary - USDTRY Path Of Least Resistance Remains Up
Mar-20 12:06
- USDZAR has recovered from its recent lows, following the pullback from the Feb 23 high. The recent downside break of the 50-day EMA, and support at 18.7622, the Feb 21 low, marks a short-term bearish development. This threatens the recent bullish theme and a resumption of weakness would signal scope for an extension lower. Support at 18.5578, the Feb 2 low, has recently been pierced. A clear break of it would open 18.2550, the Dec 29 low. On the upside, the USD is once again above the 50-day EMA. An extension higher would instead signal a reversal and expose key resistance at 19.3899, the Feb 23 high.
- The path of least resistance in USDTRY is unchanged and remains up as the USD continues to appreciate against TRY. Initial support lies at 31.7122, the 20-day EMA. The 32.00 handle has been breached and this opens 33.00.
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CAD: GS See Broad Sentiment as Bigger Driver for CAD, Rather Than CPI This Week
Feb-19 12:05
- Ahead of this week's CAD CPI release, Goldman Sachs write that while inflation is likely to be the key factor for policy expectations, CAD is likely to be more primarily driven by the beta function rather than BoC pricing.
- Resultingly, they write that as long as markets continue to unwind USD strength following strong US data, CAD will probably struggle to outperform. However, the fundamentals continue to argue for a firm USD, leaving CAD to be the biggest beneficiary on crosses.
BOE: Speakers this week
Feb-19 11:58
- In terms of MPC speakers this week, we will hear from Bailey, Broadbent, Greene and Dhingra as they testify ahead of the Treasury Select Committee on the February MPR on Tuesday. Given that we heard from Bailey (Lords EAC) and Greene last week after the labour market and inflation data, and we already know that Dhingra is voting for a cut. Broadbent spoke at the MPR press conference but hasn’t spoken since. His comments will therefore probably be most closely watched, and he continues to be seen as one of the thought leaders on the MPC – despite his last MPC meeting coming in June.
- The week ahead will also see a live-streamed MNI Connect event with Swati Dhingra on Wednesday 21 February at 14:00GMT. The subject of the event is 'Recent BOE Projections - Key Factors/Judgements.' The event is on the record and will run as a Zoom webinar. To sign up to the event, please register via the link in the full publication.
UK DATA: This week: PMIs and Fiscal Headline
Feb-19 11:57
- Looking ahead to this week, the data highlight will be the February Flash PMI data on Thursday. Markets will certainly pay attention to this release, albeit again we don’t think it will really alter the course of monetary policy over the next couple of meetings – further out the curve growth data should have more impact though.
- This week will also see the release of public finance data on Wednesday. These data are not normally too market moving, but this release is likely to be more closely watched as we suspect it will be the last release to be used in the upcoming OBR forecasts that are due to be published alongside the Budget on 6 March. However, given that the forecast process has likely already started and the January data will include large income tax payments (due to the payment deadlines), it is possible that the OBR bases its forecasts off the previous month’s data. Either way, the income tax component will be interesting to look at, while the CGNCR numbers will be important for any change to the remit.
- In terms of other data this week we will receive XpertHR pay data, CBI trends data as well as the GfK Consumer Confidence data.
