US TSYS: Core & Supercore CPI Still Hot Despite Decline
- Treasuries look to finish moderately lower - well off early Wednesday's knee-jerk highs after headline CPI inflation data came out lower than expected (0.2% vs. 0.3% est, 0.5% prior).
- Focus quickly turned to Core & Supercore CPI - while lower than expected - remained hot: Core CPI surprisingly eased to 3.12% Y/Y in February (cons 3.2) from what had been a surprisingly strong 3.26% in January.
- Supercore (core services ex-housing) inflation pulled back more than expected on the month although as noted above it was dragged lower by softer than expected airfares and vehicle insurance (for which PPI and not CPI feeds into PCE).
- Tsy June'25 10Y climbed to 111-07 high briefly but retreated to 110-15.5 low in the minutes after CPI, the 10Y contract looks to finish at 110-20.5 (-6.5), above initial technical support at 110-12+/110-00 (Low Mar 6 / High Feb 7).
- Projected rate cuts through mid-2025 continue to recede vs. early morning levels (*) as follows: Mar'25 at -0.2bp (-1bp), May'25 at -8.6bp (-9.4bp), Jun'25 at -24.6bp (-26bp), Jul'25 at -35.2bp (-37.5bp).
- Cross asset: Bbg US$ index whip-sawed post data, finish mildly high at 1266.24 (+.79) vs. 1269.25 post-data high; Crude prices gain (WTI +1.42 at 67.67, Gold higher +15.60 at 2931.50.
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AUSSIE 3-YEAR TECHS: (H5) Monitoring Resistance
- RES 3: 97.190 - High May 5 2023
- RES 2: 96.730/932 - High Sep 17 / 76.4% of Mar-Nov ‘23 bear leg
- RES 1: 96.310/360 High Feb 7 / High Dec 11
- PRICE: 96.200 @ 16:34 GMT Feb 10
- SUP 1: 95.900 - Low Jan 14
- SUP 2: 95.760 - Low 14 Nov ‘24
- SUP 3: 95.480 - Low Jan 11 2023 and a major support
A medium-term bear cycle in Aussie 3-yr futures remains intact and short-term gains are considered corrective. On the upside, an extension higher would signal scope for 96.360, the Dec 11 high. Clearance of this level would open 96.730, the Sep 17 ‘24 high. On the downside, a reversal lower from current levels would signal a resumption of the downtrend. A deeper sell-off would refocus attention on 95.760, the 14 Nov ‘24 low.
US STOCKS: Late Equities Roundup: Extending Highs, Headline Risk Remains
- Stocks have recovered from this morning's headline risk (risk off on tariff and middle-East tensions), extending highs in late Monday trade. Currently, the DJIA trades up 144.68 points (0.33%) at 44447.84, S&P E-Minis up 40.5 points (0.67%) at 6089.75, Nasdaq up 209 points (1.1%) at 19732.73.
- Headlines aside, Energy and Information Technology sectors continued to lead gainers in late tradde. Middle east tensions supported a rise in crude prices (WTI +1.45 at 72.45) in turn buoyed oil and gas stocks with APA Corp +5.49%, EQT Corp +4.34%, ONEOK +3.75% while Devon Energy gained 3.47%.
- Semiconductor and hardware makers supported the tech sector with Super Micro Computer +14.42 (won't annc earnings until Feb 28), Western Digital +5.83%, Dell +5.71% and Broadcom up 4.48%.
- On the flipside, Financial and Health Care sectors continued to underperform, banks weighing on the former: Wells Fargo -1.73%, JP Morgan -1.41%, PNC Financial -1.30%. Pharmaceuticals weighed on the Health Care sector: Incyte Corp -6.33%, Bio-Techne -3.61%, Thermo Fisher -3.32%.
- Earnings expected to be announced early Tuesday include: Leidos Holdings, Coca-Cola, DuPont de Nemours, Carlyle Group, Ecolab Inc, Fidelity National Information, WESCO International, Carrier Global Corp, Humana Inc, Marriott International and S&P Global.
GBPUSD TECHS: Trading Below Last Week’s High
- RES 4: 1.2667 High Dec 19
- RES 3: 1.2610 38.2% retracement of the Sep 26 ‘24 - Jan 13 bear leg
- RES 2: 1.2576 High Jan 7
- RES 1: 1.2550 High Feb 5
- PRICE: 1.2372@ 19:39 GMT Feb 11
- SUP 1: 1.2361/2249 Low Jan 6 / 3
- SUP 2: 1.2161 Low Jan 17 / 20
- SUP 3: 1.2100 Low Jan 10 and the bear trigger
- SUP 4: 1.2087 0.764 proj of the Sep 26 - Nov 22 - Dec 6 price swing
GBPUSD continues to trade below the Feb 5 high. The pair has recently traded above the 20- and 50-day EMAs, and pierced 1.2523, the Jan 27 high. A resumption of gains would signal scope for a move towards 1.2610, a Fibonacci retracement. On the downside, key short-term support to watch has been defined at 1.2249, the Jan 3 low. Clearance of this level would instead highlight a reversal and strengthen a bearish threat.
