US CREDIT SUPPLY: Constellation Global Funding $300m 5y +140a FV

• RES 4: 1.3753 High Jul 2  
• RES 3: 1.3681 High Jul 4
• RES 2: 1.3636 76.4% retracement of the Jul 1 - Aug 1 downleg
• RES 1: 1.3620 High Sep 15
• PRICE: 1.3605 @ 19:30 BST Sep 15
• SUP 1: 1.3475/3333 50-day EMA / Low Sep 3
• SUP 2: 1.3315 61.8% retracement of the Aug 1 - 14 bull leg
• SUP 3: 1.3249 76.4% retracement of the Aug 1 - 14 bull leg 
• SUP 4: 1.3142 Low Aug 1 and a key support      

A bullish theme in GBPUSD remains intact and price traded higher Monday. The pair has pierced resistance at 1.3595, the Aug 14 high and a bull trigger. A clear break of it would strengthen bullish conditions and open 1.3636, a Fibonacci projection. Initial support to watch is 1.3475, the 50-day EMA. A clear breach of the EMA would highlight a potential reversal and signal scope for a deeper retracement.

• RES 4: 114-10   High Apr 7 (cont.)
• RES 3: 114-07   1.0% 10-dma envelope
• RES 2: 114-00   Round number resistance 
• RES 1: 113-29   High Sep 5
• PRICE:‌‌ 113-15 @ 19:11 BST Sep 15
• SUP 1: 112-23+ 20-day EMA
• SUP 2: 112-02   50-day EMA
• SUP 3: 111-13+ Low Aug 18 and a key support  
• SUP 4: 110-25   Low Aug 1 

Treasury futures rallied to a fresh cycle high last Thursday, strengthening current bullish conditions. Note that the recent impulsive rally highlights an acceleration of the uptrend. Also, moving average studies are in a bull-mode position, highlighting a dominant uptrend. This suggests scope for an extension through 114-00 next and a test of 114-10, the Apr 7 high (cont). Initial firm support to watch is 112-23+, the 20-day EMA.

The Bank of France downgraded its real GDP growth forecasts on domestic business uncertainty and unfavourable assumptions whilst also warning that less fiscal consolidation might not lead to additional growth. Core inflation forecasts are also on net trimmed, seen below the ECB's 2% target throughout the forecast horizon. Full report here. 

• The Bank of France has trimmed its real GDP forecasts for 2026 and 2027 by 0.1pp to 0.9% in 2026 and 1.1% in 2027, "attributable to the more uncertain domestic business environment and more unfavourable assumptions concerning the international environment, notably due to a higher euro exchange rate and oil price, as well as weaker external demand."
• With 2025 real growth nudged up a tenth to 0.7% for 2025, it eyes a very steady improvement ahead.
• "As wage growth outpaces price increases, the annual growth in the purchasing power of wages of approximately 1% should underpin a recovery in household consumption."
• Within the report, core inflation (HICP ex energy & food) is mostly revised lower with 1.7% in 2025 (-0.2pp), 1.6% in 2026 (-0.1pp) and 1.6% in 2027 (unch). That lack of 2027 downward revision goes against last week's ECB 0.1pt downward revision to 1.8% in 2027 for the Eurozone as a whole. The latter was part of the headline inflation revision to 1.9% which Lagarde downplayed as a "big" 1.9%. Of course, the France forecast is already more dovish.
• That said, despite dovish growth and inflation forecasts, there are some mildly hawkish tweaks to the unemployment rate. It's seen at 7.5% in 2025 (-0.1pp), 7.6% in 2026 (-0.1pp) and 7.4% in 2027 (unch).
• Bloomberg quotes Villeroy as saying France should keep targeting a 3% GDP fiscal deficit in 2029 and that the ex-PMs budget plan can be improved on tax fairness. 

• Fiscal assumptions behind the projections: "in a more uncertain national context following the vote of no confidence in the French government, the projections are based on an unchanged fiscal policy assumption compared to June, which would result in a deficit of 5.4% of GDP in 2025, and a primary structural adjustment of 0.6% of GDP in 2026 and 0.4% in 2027. Less fiscal consolidation should not however lead to additional growth, as the prolonged fiscal uncertainty could lead to a more wait-and-see attitude on the part of households and businesses."