CZK: EURCZK Holding Onto Post-CPI Gains, Marking Biggest One-Day Gain in a Month
Jan-07 11:49
EURCZK is building on the post-CPI gains, up 0.35% on the session and set to close at its highest level in a week. Spot is trading just below the 50-day EMA at 24.249 at typing as well, with the break above this average in December relatively short lived. More significant resistance is found further out at 24.420, the Nov 5 high.
- Czech inflation softness extended into December, with most of the weakness concentrated in food. The headline +2.3% Y/Y reading was below expectations of +2.1%, with food prices down 1.1% M/M (to +2.5% Y/Y from a prior +2.8%) while energy prices fell 0.6% M/M.
- JP Morgan note that although inflation should likely stay below the CNB’s 2% target from early 2026, this is driven essentially by volatile items such as food, energy and tax changes, while core inflation remains elevated. They argue that the lower headline removes any pressure that was building for tighter policy but is not sufficient to trigger rate cuts. JPM expect the CNB to remain on hold this year and next.
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US TSYS: Futures Revisit Mid-December Lows Ahead Wednesday's FOMC
Dec-08 11:47
- Treasuries are under moderate pressure at the moment, reversing early overnight gains on average volumes. Today's data limited to NY Fed Survey of Consumer Expectations at 1100ET. Pres Trump participates in a roundtable meeting at 1400ET.
- The main focus is on Wednesday's FOMC decision, widely expected to deliver a third consecutive 25bp cut after NY Fed Williams’ uncharacteristic guidance following the delayed September payrolls report. Potentially contentious meeting with many FOMC members preferring to have paused.
- The dot plot distribution will be watched keenly whilst we expect the economic projections to show an upward revision for GDP growth and downward revision for core PCE inflation.
- The FOMC will see two months of JOLTS data on the first day of their two-day meeting otherwise must wait until the following week for NFP (Dec 16) and CPI (Dec 18) reports for November.
- Treasury Mar'26 10Y futures are revisiting November 20 levels: currently trading -3.5 at 112-13 vs. -12 low, 10Y yield +.0195 to 4.1545%. Bearish conditions resume with sights on 112-07, the Nov 5 high and a bear trigger. A reversal higher is required to once again refocus attention on the key resistance and bull trigger at 113-29+, the Oct 17 high.
OUTLOOK: Price Signal Summary - Recent USDJPY Weakness Still Appears Corrective
Dec-08 11:43
- In FX, a bullish theme in EURUSD remains intact. Gains last week resulted in a breach of key short-term resistance at 1.1656, the Nov 13 high and a bull trigger. The move higher highlights a potential reversal and opens 1.1694 next, the 50.0% retracement of the Sep 17 - Nov 5 bear leg. Clearance of this retracement point would strengthen the developing bull theme. On the downside, initial support to watch is 1.1601, the 20-day EMA. A breach of it would be bearish.
- A bull theme in GBPUSD remains intact and the pair is holding on to its recent gains. The breach of resistance around the 50-day EMA, at 1.3264, undermines a recent bearish theme and highlights a stronger reversal. This paves the way for an extension towards 1.3452, 50.0% retracement of the Sep 17 - Nov 4 bear leg. Initial firm support is seen at 1.3226, the 20-day EMA.
- Recent weakness in USDJPY is considered corrective. The deeper retracement has allowed an overbought condition to unwind. An extension lower would expose the 50-day EMA at 153.49 and the next important support. Moving average studies remain in a bull-mode position, highlighting a dominant medium-term uptrend. A resumption of the trend would open 158.00.
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Dec-08 11:41
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