STIR: Effective Fed Funds Rate
FRBNY EFFR for prior session:
- Daily Effective Fed Funds Rate: 5.33% (+0.00), volume: $67B
- Daily Overnight Bank Funding Rate: 5.32% (+0.00), volume: $157B
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USDCAD TECHS: Watching Support
- 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: 1.3748/85 61.8% of the Apr 16 - Mar 16 bear leg / High Apr 30
- PRICE: 1.3644 @ 16:27 BST May 31
- SUP 1: 1.3590 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
A bullish trend in USDCAD remains intact and pullbacks from recent highs are deemed corrective. Key supports at 1.3647, the 50-day EMA, and 1.3610, the May 3 low, remain intact. They have recently been pierced, however, a clear break of both price points is required to threaten the bullish theme and signal scope for a deeper retracement. A stronger resumption of gains would refocus attention on the bull trigger at 1.3846, the Apr 16 high.
US TSYS: Rates Off Midweek Lows Ahead Fed Blackout Start
- Treasuries continued to rebound off midweek lows Friday, rebounding/extending highs after in-line PCE Deflator MoM (0.3% vs. 0.3% est); YoY (2.7% vs. 2.7% est) and PCE Core Deflator MoM (0.2% vs. 0.2% est); YoY (2.8% vs. 2.8% est). Meanwhile, Personal Income (0.5% vs. 0.3% est), Personal Spending (0.2% vs. 0.3% est).
- Treasury futures continued to extend session highs, Sep'24 10Y closing in on initial technical resistance of 108-31 (20-day EMA) after latest Chicago PMI data came out lower than expected at 35.4 vs. 41.1 est, and weaker than prior 37.9 in April.
- Current cash yields lower: 2s -.0438 at 4.8810%, 10s -.0396 at 4.5065%, 30s -.0303 at 4.6491%, while curves inch off earlier flatter levels: 2s10s +0.432 at -37.860, 5s30s +1.724 at 12.786.
- Holding steady for the next couple meetings -- late year rate cut projections have gained slightly post data: June 2024 at -0% w/ cumulative rate cut 0.0bp at 5.328%, July'24 at -12% w/ cumulative at -3.5bp at 5.293%, Sep'24 cumulative -14.7bp (-13.9bp pre-data), Nov'24 cumulative -21.7bp (-20bp pre-data), Dec'24 -35.5bp (-32.9bp pre-data).
- Reminder, the Federal Reserve enters it's self imposed policy blackout at midnight, running through June 13, the day after the next FOMC policy announcement.
AUDUSD TECHS: Support Holds
- RES 4: 0.6771 High Jan 3
- RES 3: 0.6751 76.4% retracement of the Dec 28 - Apr 19 bear leg
- RES 2: 0.6729 High Jan 12
- RES 1: 0.6680/6714 High May 28 / 16 and the bull trigger
- PRICE: 0.6638 @ 16:22 BST May 31
- SUP 1: 0.6591 Low May 30
- SUP 2: 0.6587 50-day EMA
- SUP 3: 0.6558 Low May 8
- SUP 4: 0.6465/6407 Low May 1 / Low Apr 22
A bullish cycle in AUDUSD that started Apr 19 remains intact and recent short-term weakness appears to have been a correction. Attention is on the key short-term support at 0.6587, the 50-day EMA. A clear break of this average would signal scope for a deeper retracement and open 0.6558 initially, the May 8 low. For bulls, a resumption of gains would pave the way for 0.6751, a Fibonacci retracement.
