HUF: EURHUF Recovery Off Cycle Lows Tracking Higher NatGas Prices
Aug-21 10:55
EURHUF has retained a close relationship with European natgas prices, moving higher in tandem with Netherlands TTF 1-month future contracts off this week’s earlier cycle lows – which are up 5% compared to Monday’s worst levels. HUF underperformance across CEE since Monday is therefore unsurprising given that Hungary is the most gas-intensive economy in the region, but the broader bullish theme for the currency remains intact.
- Meanwhile, an empty local data slate this week and the national holiday on Wednesday has meant that forint price action has been taking cues from swings in global risk sentiment and has generally lacked distinct conviction in either direction. More broadly, the low levels of volatility across global currency markets has heightened interest in the carry trade, reinforcing the bearish EURHUF theme. Goldman Sachs noted again recently that HUF remains one of their preferred carry longs.
- Recent cycle lows for the cross set sights on next support at 391.34, the 1.00 projection of the Jan 7 - Mar 21 - Apr 14 price swing. A break here would turn attention to the 390.00 handle. On the upside, short-term resistance is at 398.49, the 50-day EMA.
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SOFR OPTIONS: BLOCK: Oct'25 SOFR Broken Call Condor
Jul-22 10:52
- 5,000 SFRV5 96.12/96.18/96.31/96.43 broken call condors, 0.5 net vs. 96.06/0.05% at 0645:11ET
OUTLOOK: Price Signal Summary - Bear Threat In Oil Futures Remains Present
Jul-22 10:48
- On the commodity front, a bull cycle in Gold that started Jun 30, remains intact, and Monday’s bullish start to the week marks an extension of the recovery. $3395.1, the Jun 23 high, has been pierced. A continuation would open $3451.3, the Jun 16 high. Note that moving average studies are in a bull-mode position highlighting a dominant uptrend. The bear trigger is $3248.7, the Jun 30 low. An initial firm support to watch is 3282.8, the Jul 9 low.
- In the oil space, a bearish theme in WTI remains intact and the recovery since Jun 24 is considered corrective. The sharp reversal from the Jun 23 high continues to highlight scope for an extension lower. Support to watch is the 50-day EMA, at $65.68. The average has been pierced, a clear break of it would expose $58.87, the May 30 low. Initial resistance to monitor is $71.20, the 50.0% retracement of the Jun 23 - 24 high-low range.
US TSYS: Potential Trump Comments And Fed Regulatory Conference Headline
Jul-22 10:42
- Treasuries trade modestly bear steeper but remain within yesterday’s range, amidst thin volumes.
- It’s another quieter docket today before the calendar picks up towards the end of the week, although any regulatory remarks from a Fed conference could be of note.
- What’s more, President Trump has a busier schedule today, where we can expect comments from his meeting with the President of the Philippines (greeting 1100ET, meeting itself with White House press pool 1115ET).
- Cash yields are 0-1.5bp higher on the day.
- Curves are elevated by recent standards but remain within ranges, including 2s10s at 52.9bp (+1bp) and 5s30s at 103.8bp (+0.8bp).
- TYU5 trades at 111-01+ (-04+) on light cumulative volumes of 210k.
- It has eased a little further away from yesterday’s slowly found high of 111-09+, what’s now seen as initial resistance before a more notable 111-13+ (Jul 10 high). Whilst lower on the day, the contract still holds the shift away from key support at 110-08+ (Jul 14/16 lows).
- Data: Philly Fed non-mfg Jul (0830ET), Richmond Fed mfg Jul (1000ET)
- Fedspeak: Bowman on CNBC (0730ET), Powell welcome remarks at regulatory conference (0830ET), Bowman fireside chat with Sam Altman at the same conference (1300ET) – see STIR bullet
- Bill issuance: US Tsy $80B 6W bill auction (1130ET)
