US TSYS: Firm EZ PMIs Help Consolidate Thursday Sell-Off, CPI and PMIs Ahead
Oct-24 10:50
- Treasuries consolidate yesterday’s sell-off in moves that were driven by a surge in oil futures before strong gains in equities after the US cash open.
- The biggest overnight move came on stronger than expected Eurozone PMIs, led by Germany. It more than unwound a small rally on Trump halting Canada trade negotiations.
- Today’s focus is firmly on US CPI but with mention also for flash PMIs and less so the U.Mich consumer survey. President Trump has an open schedule before flying to Malaysia tonight.
- Cash yields are 0.2-0.9bp higher on the day, led by 30s.
- 10Y yields at 4.005% (+0.4bp) sit just above the 4.00% handle with the next target at 4.05%, equating to 113-01 in TYZ5 today.
- TYZ5 trades at 113-11+ (-04) on modest cumulative volumes of 240k, off an earlier low of 113-10+ after yesterday’s 113-12.
- It nudges closer to support at 113-06+ (20-day EMA) which sits before that yield-driven 113-01, although a bullish trend structure remains with resistance seen at 114-02 (Oct 17 high).
- Data: US CPI Sep (0830ET), S&P Global Flash PMIs Oct (0945ET), U.Mich consumer survey Oct F (1000ET), KC Fed services Oct (1100ET)
- Politics: Trump departs White House for Malaysia (2240ET)
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US TSYS: Tsys Inside Ranges Ahead New Home Sales, US$ Climbing
Sep-24 10:45
- Treasuries are running steady to mixed, inside a narrow overnight range after 10s revisited last Thursday's closing levels. US$ climbing, Bbg index +4.48 at 1200.15 - early Monday levels.
- TYZ5 currently trades at 112-28 (+0.0) on cumulative volumes of 220k. 10Y yield +.0077 at 4.1138%.
- Moving average studies remain in a bull mode position, highlighting a dominant uptrend. The bull trigger has been defined at 113-29, the Sep 11 high. Otherwise, the pullback in Treasury futures appears corrective after TYZ5 moved through the 20-day EMA, at 112-28. The break signals scope for a deeper retracement and attention turns to the 50-day EMA, at 112.10 and the next key support.
- Lighter data on tap ahead a much busier Thursday: MBA Mortgage Applications (0700ET), New Home Sales (1000ET) along with Building Permits at some point today. Main focus is on Thursday's heavy data drop: Personal Consumption, GDP, Durables/Cap Goods, and weekly claims.
- Treasury supply: $28B 2Y FRN re-open (91282CNQ0) & $65B 17W bill auctions (1130ET), $70B 5Y Note Auction (91282CPA3) at 1300ET.
- Fedspeak: At 1610ET, SF Fed President Daly's economic outlook at the annual Spencer Fox Eccles Convocation at the University of Utah’s School of Business, moderated Q&A follows.
- Politics: President Trump's schedule is muted today after speaking at the at the United Nations yesterday, largely closed press items. Unscheduled social media posts always a potential market mover, however.
OUTLOOK: Price Signal Summary - Gold Bulls Remain In The Driver's Seat
Sep-24 10:41
- On the commodity front, Gold is in a clear bull cycle and shallow short-term pullbacks remain corrective. A fresh all-time high once again, yesterday, confirms a resumption of the primary uptrend and an extension of the sequence of higher highs and higher lows. The next objective is the $3800.0 handle. Initial firm support lies at $3610.2, the 20-day EMA.
- In the oil space, the trend condition in WTI is unchanged - a bear cycle remains intact and short-term gains are considered corrective. The pullback from the Sep 2 high highlights a possible reversal and the end of a corrective phase between Aug 13 - Sep 2. Initial resistance to watch is $65.43, the Sep 2 high. A stronger resumption of weakness would open $57.50, the May 30 low.
OUTLOOK: Price Signal Summary - USDJPY Bull Cycle Remains In Play
Sep-24 10:29
- In FX, the trend theme in EURUSD is unchanged, it remains bullish and the recent pullback appears corrective. Resistance at 1.1743, the Aug 22 high, has recently been cleared, reinforcing a bull cycle. Last week's gains resulted in a climb above 1.1829 the Jul 01 high and a bull trigger. Clearance of this hurdle confirms a resumption of the uptrend and opens 1.1923, the 2.00 projection of the Feb 28 - Mar 18 - 247 price swing. Support to watch is 1.1678. the 50-day EMA.
- A bullish theme in GBPUSD remains intact and the latest move down from the Sep 17 high is considered corrective - for now. However, the pair has traded through the 50-day EMA and this leaves support at 1.3458 exposed, a trendline drawn from the Aug 1 low. Clearance of this line would strengthen a bearish threat. For bulls, a resumption of gains would refocus attention on key short-term resistance at 1.3726, the Sep 17 high.
- USDJPY is holding onto the bulk of its latest gains. A bullish candle pattern on Sep 17 - a hammer formation - provided an early reversal signal. Note too that moving average studies remain in a bull-mode condition and this continues to highlight a dominant uptrend. A resumption of gains would open 149.14, the Sep 3 high. Pivot support is 145.49, the Sep 17 low.
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