EMERGING MARKETS: CEEMEA FX Price Signal Summary - USDZAR Bear Threat
Sep-05 11:28
- A bear threat in USDZAR remains present. The break lower in August confirmed a resumption of the downtrend and maintains the bullish price sequence of lower lows and lower highs. This paves the way for an extension towards 17.5713, the Jul 28 ‘23 low and 17.4193, the Jul 27 ‘23 low and the next key support. Initial firm resistance is seen at 18.1028, the 50-day EMA. Short-term gains are considered corrective.
- The path of least resistance in USDTRY is unchanged and remains up. Fresh cycle highs highlight a resumption of the trend, and the pair has breached the 34.00 handle. This opens 35.00. Initial support lies at 33.8133, the 20-day EMA.
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UK: Reeves' Carried Interest Comments May Matter More Than Not Ruling Out CGT Hikes (1/2)
Aug-06 11:24
While the focus of Rachel Reeves' interview on Monday has been on her refusal to rule out raising capital gains tax, potentially more insightful is her evolving position on the tax treatment of carried interest earned in the private equity industry.
- The Labour government has targeted a reform of carried interest since being in opposition and show no signs of reversing course.
- However, Reeves indicated that there should be a distinction between those who have capital risk and those that don't, stating "if you put in your own capital, it you've got capital at risk, I think it is right that you benefit from a more generous form of tax relief." This repeats similar comments that Reeves recently made and reflects Labour's evolving position on the issue.
- From a broader CGT perspective, this would suggest not aligning CGT with income tax bands for investors that have capital at stake.
OUTLOOK: Price Signal Summary - A Deeper Pullback In Gilts Would Be Considered Corrective
Aug-06 11:07
- In the FI space, a bull cycle in Bund futures remains in play and the latest rally reinforces current conditions. 133.21, the Jun 14 high, was cleared last week, confirming a resumption of the uptrend. MA studies are in a bull-mode position, highlighting a rising trend. Sights are on 136.45, 76.4% of the Dec 27 - May 31 downleg (cont). The contract is off Monday’s high, an extension lower would allow an overbought condition to unwind. Firm support is 133.07, the 20-day EMA.
- Gilt futures traded higher last week, marking a confirmation of the uptrend that started May 29. Yesterday’s high print reinforces current conditions. Note that 99.23, the Jun 21 high, has been cleared. Scope is seen for a climb towards 101.78, the 2.236 projection of the May 29 - Jun 4 - 10 price swing. Initial key support lies at 99.23, the Jun 21 high. A deeper pullback would be considered corrective and this would allow an overbought trend condition to unwind.
GBP: Extending losses
Aug-06 11:00
- The British Pound extends further losses, now down 0.70% versus the Dollar and over 120 pips range so far for the session in Cable.
- The EUR finds a bid, helped by that continuation lower, and market participants will be eyeing a test back to 0.86196, Yesterday's high in EURGBP, while the key area of interest remains up to 0.8645, the April double top peak and the highest level since early January.
