ASIA: Coming up in the Asian session on Thursday
Aug-07 21:00
| 0330GMT | 1130HKT | 1430AEDT | India Aug RBI Rate Decision |
| 0100GMT | 0900HKT | 1200AEDT | Philiipines 2Q GDP |
| 0700GMT | 1500HKT | 1800AEDT | Taiwan July Trade Balance |
| Indonesia July Consumer Confidence Index |
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USDCAD TECHS: Key Support Stays Intact For Now
Jul-08 20:00
- RES 4: 1.3899 High Nov 1 and a key resistance
- RES 3: 1.3846/55 High Apr 16 and the bull trigger / High Nov 10 2023
- RES 2: 1.3755/3792 High Jul 2 / High Jun 11
- RES 1: 1.3674 50-day EMA
- PRICE: 1.3635 @ 16:40 BST Jul 8
- SUP 1: 1.3590 Low May 16 and a key support
- SUP 2: 1.3547 Low Apr 9
- SUP 3: 1.3512 50.0% retracement of the Dec 27 - Apr 16 bull cycle
- SUP 4: 1.3478 Low Apr 4
A short-term bearish threat in USDCAD remains in place. The pair has recently breached the 50-day EMA - currently at 1.3674. This reinforces a bearish condition and exposes 1.3590, the May 16 low and a key support. Clearance of this level would highlight an important technical break. Initial firm resistance to watch is 1.3755, the Jul 2 high. A break of this level would be bullish. Note that the medium-term trend signal remains bullish - for now.
US OUTLOOK/OPINION: HSBC See Vehicle Insurance As An Important Swing Factor In June CPI
Jul-08 19:57
- Ahead of Thursday's release, HSBC see core CPI at 0.247% M/M in June, with the Y/Y rising from 3.4% to 3.464%.
- “The price index for motor vehicle insurance could be an important swing factor. This index fell 0.1% m-o-m in May, following 28 consecutive months in which monthly increases ranged from +0.5% to +2.6%. We expect a 1.0% rise in June, with possible risks in either direction.”
- They see core goods prices falling -0.1% M/M, aided by new vehicles -0.1% and used vehicle prices -0.9%.
- “We look for a 0.3% m-o-m rise in the weighted average of the rental price indexes (OER and rent of primary residence); if realised, this would be the smallest increase in nearly three years.”
- “We expect a 0.4% m-o-m rise in the core services CPI excluding rents; this category includes motor vehicle insurance prices.”
US DATA: Consumer Credit Growth Picks Up In May, But Overall Dynamics Subdued
Jul-08 19:34
US consumer credit grew by a 4-month high $11.4B in May, above the expected $8.9B and April's $6.5B, per Federal Reserve data. That's equivalent to a 2.7% annualized growth rate (all figures seasonally adjusted).
- Revolving credit (e.g. credit cards) rebounded sharply to rise $7.0B (a +6.3% ann. rate) vs a $0.9B contraction in April, while nonrevolving credit (e.g. student loans, auto loans) softened to $4.3B (a +1.4% ann. rate) from $7.4B prior.
- While these figures are relatively robust compared to Mar/Apr, they are part of a noisy month-to-month series that suggests flat demand for credit from consumers in recent quarters, alongside rising household savings rates and softer consumption.
- Those dynamics have gone hand-in-hand with a loosening labor market, relatively high interest rates and rising delinquency rates, albeit there is little sign of an outright capitulation of consumers with household debt service ratios still at/near multi-decade lows.
- The next quarterly Fed Senior Loan Officer Survey, which gives a broad sense of underlying lending and borrowing conditions, is due out in August. The most recent report in May suggested softer demand across all main categories of consumer loans, which combined with the above factors points to higher-for-longer Fed policy rates having an impact in slowing demand.
