ECB: MNI ECB Preview - July Hold, September Cut
Jul-16 08:48
- With no material developments on the data front since June and various GC members playing up the importance of quarterly projection meetings, the ECB will keep policy rates unchanged this week.
- Although the ECB has previously shown that its data dependence and meeting-by-meeting approach has a degree of inbuilt flexibility (as was the case when steering markets to expect the June cut), there is no need to pre-commit to a September cut at this juncture.
- Given the stickiness of domestic inflationary pressures – namely service prices – we continue to caution that a ‘one-and-done’ is a small, but still significant, risk for 2024.
Full preview, including summary of sell-side views and exclusive MNI policy analysis here: https://roar-assets-auto.rbl.ms/files/65234/ECB%20Preview%20July%202024.pdf
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USDCAD TECHS: Outlook Remains Bullish
Jun-14 19:30
- RES 4: 1.3977 High Oct 13 ‘23 and a key M/T resistance
- RES 3: 1.3899 High Nov 1 and a key resistance
- RES 2: 1.3846/55 High Apr 16 and the bull trigger / High Nov 10 2023
- RES 1: 1.3792 High Jun 11
- PRICE: 1.3759 @ 15:52 BST Jun 14
- SUP 1: 1.3667/1.3590 50-day EMA / Low May 16 and the bear trigger
- 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
USDCAD has managed to recover from Wednesday’s intraday low of 1.3680. Key support is unchanged at 1.3590, the May 16 low. A clear break of this level would threaten a bullish theme and signal scope for a deeper retracement. For now, the trend outlook remains bullish, a continuation higher would signal scope for a climb towards key resistance and the bull trigger at 1.3846, the Apr 16 high.
US TSYS: Tsy Curves Bull Flatten Despite Soft Data
Jun-14 19:19
- Treasury futures look to steady to mixed in the short end, mildly higher out the curve. Treasuries opened higher, taking cues from EGBs again amid ongoing political uncertainty in France after Pres Macron announced a snap election in the aftermath of last Sunday's EU parliamentary elections.
- Rates see-sawed off early morning highs after lower than expected Import/Export data: Import Price Index ex Petroleum MoM (-0.3 vs. 0.2 est, prior down revised to 0.6% from 0.7%) while Export Price Index MoM fall to -0.6% vs. 0.1% est.
- Still off opening highs, Treasury futures gained slightly after lower than expected UofM Sentiment (65.6 vs. 72.0 est, 69.1 prior), Current Conditions (62.5 vs. 72.2 est). Meanwhile, 1 Yr Inflation slightly higher than exp at 3.3% vs. 3.2% est (3.3% prior, however), 5-10 Yr Inflation (3.1% vs 3.0% est).
- The Sep'24 10Y futures contract currently trades +3.5 at 110-26.5 vs. 111-01 high after the bell. Cash yields are running mildly lower: 5s -.0162 at 4.2278, 10s -.0330 at 4.2112%, 30s -.0485 at 4.3479%, while curves flatter: 2s10s -2.362 at -47.841, 5s30s -3.226 at 11.883.
- Rate cut projections look steady to slightly lower vs early Friday (*): July'24 at -12% w/ cumulative at -3bp at 5.298%, Sep'24 cumulative -20bp (21.1bp), Nov'24 cumulative -29.9bp (-31.1bp), Dec'24 -50.5bp (-51.1bp).
US STOCKS: Late Equities Roundup: Paring Early Losses
Jun-14 19:08
- Stocks continue to trade near steady to weaker (DJIA underperforming) in late Friday trade, off early session lows as shorts covered ahead of the weekend. Currently, the DJIA is down 76.02 points (-0.2%) at 38572.96, S&P E-Minis down 6.25 points (-0.11%) at 5432.25, Nasdaq up 8.9 points (0.1%) at 17676.47.
- Information Technology continued to lead gainers for the fourth consecutive session, software and semiconductor outperforming: Adobe is currently up 14.60% after beating 2Q earnings late Thursday citing strong AI demand. Other gainers included Broadcom, adding +3.79% to Thursday's strong gains after beating estimates late Wednesday, ServiceNow +2.56%, Autodesk +1.62%.
- Meanwhile, interactive media and entertainment supported Communication Services in late trade: Netflix +2.87%, Take Two +0.81%, Google +0.62%.
- Industrials and Materials sectors underperformed in the second half, industrial and electric machinery shares weighed on the former: Parker-Hannifin -5.47%, Howmet Aerospace -5.69%, GE Vernova -4.18%. Shares of chemical companies weighed on Materials in late trade: Albemarle -4.07%, Air Products % Chemicals -2.94%, Eastman Chemicals -2.84%.
