MNI EXCLUSIVE: EU officials discuss the timing of a new EUR150 defence programme
May-16 10:55
EU officials discuss the timing of a new EUR150 billion programme to provide defence loans.- On MNI ...
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OUTLOOK: Price Signal Summary - GBPUSD Bull Cycle Remains In Play
Apr-16 10:48
- In FX, the trend outlook in EURUSD remains bullish and the pair is holding on to the bulk of its recent gains. The recent breach of 1.1144, the Apr 3 high and a bull trigger, confirmed a resumption of the uptrend and maintains the price sequence of higher highs and higher lows. Sights are on 1.1555 next, a 1.382 projection of the Feb 28 - Mar 18 - 27 price swing. Initial support lies at the 1.1144 breakout level. Key support is unchanged at the 20-day EMA, at 1.1001.
- GBPUSD maintains a bullish tone and the pair continues to appreciate. Price has breached key resistance at 1.3207, the Apr 3 high and a bull trigger. This confirms the end of the recent Apr 4 - 7 correction, and highlights a resumption of the medium-term uptrend. Note that moving average studies are in a bull-mode position, highlighting a dominant uptrend. Sights are on 1.3305 next, the Oct 2 ‘24 high. Support to watch is 1.2963, the 20-day EMA.
- The trend condition in USDJPY remains bearish and the pair is trading at its recent lows. Recent weakness confirms a resumption of the downtrend and maintains the price sequence of lower lows and lower highs. Note too that moving average studies are in a bear-mode position highlighting a dominant downtrend. Sights are on 141.65 next, the Sep 30 ‘24 low. Initial firm resistance to watch is the 20-day EMA, at 146.95. First resistance is 144.64, the Apr 11 high.
CANADA: USDCAD Bear Cycle Remains Intact, Eyes US Election Lows
Apr-16 10:48
- USDCAD received a boost on Tuesday following the softer-than-expected March CPI data. The data did not result in any reconsideration of views for today's BOC decision that we have seen. Of six major Canadian banks, three had seen a rate hold and three a 25bp cut, and that continues to be the case post-CPI. Our full preview of today’s decision is here: https://mni.marketnews.com/3GcVyvz
- Broad dollar weakness today has helped USDCAD erode a solid portion of yesterday’s bounce, and a bear cycle for the pair remains firmly intact. Importantly, Monday’s low came within 7 pips of the US election lows, located at 1.3822, a level of key short-term significance. Moving average studies are in a bear -mode position, highlighting a dominant downtrend.
- The recent fresh trend lows signals scope for a move towards 1.3744, a Fibonacci retracement. Below here, October lows at 1.3696 and 1.3643 could become notable targets should the central bank provide a relatively hawkish lean.
- However, should the BOC decide to cut rates and offer a dovish leaning guidance, the crosses may provide a more attractive expression of CAD shorts. Notably EURCAD is trading within 200 pips of a key medium-term inflection point, just below the psychological 1.6000 level that proved extremely significant in the aftermath of the covid pandemic. Additionally, CADJPY has recently been probing the August carry unwind lows around 101.65, of which a break could signal scope for the next leg lower towards 100.00.
US TSYS: Twist Steeper Ahead Of An Important Docket
Apr-16 10:47
- Treasuries trade twist steeper, having pared earlier outright gains across the curve.
- Gains had been seen in more traditional risk off flow following late yesterday’s news of Nvidia’s export curbs to China although were pared when Bloomberg reported China being open to talks if it sees a number of steps from the Trump administration.
- That said, the long-end continues to underperform, with 30s seeing some selling pressure following a weak German 30Y auction to extend a move that started prior.
- Cash yields are 3bp lower (2s/3s) to 0.7bp higher (20s and 30s).
- TYM5 trades at 111-02 for back little changed after an overnight high of 111-09+ to extend yesterday’s gains. Volumes of 365k are higher than the past two overnight sessions but low compared to huge sessions over recent weeks.
- The latest bounce is considered corrective with further resistance seen at 111-25 (50% retrace of Apr 7-11 bear leg) whilst support is seen at 110-15+ (Apr 14 low) with attention on a bear trigger at 109-08 (Apr 11 low).
- Today’s Tsy 20Y auction provides another important test of duration demand after last week’s 10Y and 30Y offerings saw solid results (all-time high for indirect take-up and 2.5bp stop through respectively).
- Before the auction, retail sales at 0830ET headline data before potential spillover from a tight BoC decision at 0945ET. Fed Chair Powell then follows up at 1330ET. President Trump also says he will attend a meeting with a Japan trade delegation.
- Data: Weekly MBA mortgages (0700ET), Retail sales Mar (0830ET), NY Fed services (0830ET), IP/Cap Util (0915ET), Business inventories Feb (1000ET), NAHB housing index Apr (1000ET), TIC flows Feb (1600ET)
- Fedspeak: Hammack on “Fed 101” (1200ET, text + Q&A), Powell on economic outlook (1330ET, text + Q&A) – see STIR bullet – and then after the close Schmid talks with Logan on the economy (1900ET, Q&A only)
- Coupon issuance: US Tsy $13B 20Y Bond reopen - 912810UJ5 (1300ET)
- Bill issuance: US Tsy $60B 17W bill auction (1130ET)
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