USDCAD TECHS: Correction Higher Extends
- RES 4: 1.4641 76.4%retracement of the Feb 3 - 14 bear leg
- RES 3: 1.4548 61.8% retracement of the Feb 3 - 14 bear leg
- RES 2: 1.4472 50.0% retracement of the Feb 3 - 14 bear leg
- RES 1: 1.4435 Intraday high
- PRICE: 1.4431 @ 14:37 GMT Feb 28
- SUP 1: 1.4240 Low Feb 25
- SUP 2: 1.4151/4107 Low Feb 14 / 50.0% of Sep 25 - Feb 3 bull run
- SUP 3: 1.4011 Low Dec 5 ‘24
- SUP 4: 1.3944 61.8% retracement of the Sep 25 ‘24 - Feb 3 bull cycle
The USDCAD correction that started Feb 14 remains in play for now. Resistance at 1.4380, the Feb 10 high, has been breached. A move above this hurdle highlights a possible early reversal signal, and opens 1.4472 next, a Fibonacci retracement. The short-term bear trigger has been defined at 1.4151, the Feb 14 low. A move through this support would confirm a resumption of the bear cycle and expose 1.4107, a Fibonacci retracement.
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EGBS: OAT Outperformance Vs. Iberians Stalls
Looking a little more broadly than the spread to Bunds, the mid-January richening for French paper on the 10-Year SPGB/OAT/PGB butterfly has seemingly stalled.
- This suggests that the latest leg of tightening seen in OAT/Bunds (since the middle of last week) has been more of a broad EGB spread tightening move, as opposed to an OAT-driven move.
- The structure last trades at -45.2bp vs. a January closing high of -44bp, with the December closing high at -41.6bp remaining intact.
- Relative Spanish & Portuguese credit rating trajectories and fiscal situations (outside of short-term Spanish spending on flood relief) will likely prevent meaningful OAT outperformance on the structure as long as French fiscal and political risks remain evident.
Fig. 1: 10-Year SPGB/OAT/PGB Butterfly (bp)
Source: MNI - Market News/Bloomberg
EQUITIES: US Cash opening calls
US Equity futures have ran out of steam in the last few hour, the NQH5 has managed to bounce 3.18%, and the Emini 2.1% from Yesterday's low to their printed high today.
Looking at Cash Indices, SPX should see a small upside gap, but the NDX should be quite short of Yesterday's best level.
- Calls: SPX: 6,029.0 (+0.3%); DJIA: 44,750 (+0.1%/+36pts); NDX: 21,174.6 (+0.2%).
SONIA: Ratio call ladder
SFIG5 95.65/95.70/95.75c ladder 2x1x1, bought for 2.5 in 5k.
