UK DATA: CPI data shouldn't change market pricing notably
Nov-19 07:28
- Is this data enough for Bailey to vote for a December cut? Headline, services and food all saw marginal downside surprises to the BOE's forecast and as we have noted since the November MPC meeting, we think that if data comes broadly in line with Bank projections and we don't get an inflationary Budget we will likely see Bailey support a cut. This also follows softer labour market data last week. There is still uncertainty over next week's Budget, however.
- GBPUSD is broadly where it was before the data now - and we wouldn't expect this data to really drive notably moves on either SONIA markets (which price just under 19bp for December) or gilts.
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STIR: Shorter-End of the Curve in Focus, Euribor Calendar Spread a Highlight
Oct-20 07:23
- Early STIR flow noted in the shorter-end of the curve with the Schatz volumes topping both Bobl and the Bunds going into the European session.
- The Euribor strip is also seeing elevated volume in the front two contracts, this is led by the calendar spread being bought at -7.5 in 4k so far.
- As such, ERZ5/H6 is finding some support at the 2024 low of -8.5, this was Friday's printed low. Looking at the chart, -10 is record low for this calendar spread:
FOREX: USD Broadly Flat Having Found a Base Last Week
Oct-20 07:20
- The dollar is largely flat against broader G10 FX as markets await the delayed US CPI print on Friday. The early best performer is SEK, up 0.3% through the European open, extending its status as the best performer YTD, up 17.5% since January 1st. Initial support remains at 9.4000, although USDSEK did print a 9.3958 low on Friday.
- JPY saw another volatile 82 pip session overnight. Politics remains the key driver as Japan's LDP and Ishin parties announced the formation of a coalition, which should pave the way for Takaichi to become the new PM.
- The USD received a mild mid-APAC boost as Trump repeated that the US and China will be fine, however most G10 crosses have settled back to near mid-traded ranges early Monday.
SILVER TECHS: Trading Above Support
Oct-20 07:10
- Trading Above SupportRES 4: $56.153 2.500 proj of the Aug 20 - Sep 16 - 17 price swing
- RES 3: $55.444 2.382 proj of the Aug 20 - Sep 16 - 17 price swing
- RES 2: $55.00 - Round number resistance
- RES 1: $54.567 - 2.236 proj of the Aug 20 - Sep 16 - 17 price swing
- PRICE: $51.753 @ 08:10 BST Oct 20
- SUP 1: $48.736 - 20-day EMA
- SUP 2: $44.692 - 50-day EMA
- SUP 3: $41.135 - Low Sep 17
- SUP 4: $40.404 - Low Sep 4
Trend signals in Silver remain bullish. The metal traded to a fresh cycle high again, on Friday. The move higher confirms a resumption of the primary uptrend and maintains the bullish price sequence of higher highs and higher lows. Sights are on $54.567, a Fibonacci projection, and the $55.00 handle. Note that the trend is in overbought territory, a deeper pullback would allow this condition to unwind. Support to watch is $48.736, the 20-day EMA.
