BUNDS: Focus remains on UK markets
Sep-29 06:22
- Bund have once again seen a wide range overnight trading session, and decent volumes pre cash open.
- The contract is unwinding some of yesterday's rally which was led by the BoE's intervention in long end Bonds markets.
- Upside is capped following the decent beat in NRW CPI, coming higher than last pre cash open.
- In terms of data for Europe, the attention is on the German regional/National CPIs, and Italian CPI.
- On the other side of the Pond, sees GDP and Core PCE, but these are third readings.
- SUPPLY: Heavy supply for Italy, EU2.5bn 10yr, and EU2.75bn 5yr (equates combined to 39.1k of BTP), should weigh into the bidding deadline.
- Italy also sell 2029 floating bond, but won't impact BTP.
- SPEAKERS: A packed session for speakers, but all eyes on the UK ones.
- Today includes Ramsden, Tenreyro and Pill. ECB Simkus, Panetta, Centeno, Villeroy, Knot, Elderson, Rehn, Guindos, Kazaks, de Cos, Fed Bullard, Mester, Daly.
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BUNDS: Reversing early state-CPI led gains
Aug-30 06:11
- Bund futures have now reversed their earlier move higher on the North Rhine Westphalia state CPI.
- Futures had earlier moved from 148.82 at the time of the release to hit a high of 149.22 (40 ticks higher) but over the past few minutes have fallen back to around 148.70 at the time of writing, around 10 ticks above yesterday's close but 50 ticks off the high of around an hour ago.
- There is no obvious headline trigger for the reversal, other than more European/UK traders getting to their desks.
MARKET INSIGHT: What to watch
Aug-30 05:58
- It will be a busy data day today. Bunds have already moved higher this morning after the NRW state CPI came in at 0.3%M/M - lower than the 0.4%M/M expectation for the national print that is due this afternoon. Throughout this morning we will have a number of other German states report CPI as well as Spanish CPI (due at 8:00BST / 9:00CET). These will all be viewed through the lens of markets pricing in 67bp for the September ECB meeting after the Reuters sources piece last week suggested a 75bp hike was under discussion, some hawkish comments from Schnabel at the weekend and Lane leaving the options for any policy action open in this speech yesterday.
- As well as the German and Spanish inflation data due today (and French, Italian and Eurozone tomorrow) markets will continue to pay attention to any updates on EU plans to cap or at deal with energy prices. An extraordinary summit is being held the day after the upcoming ECB policy announcement, which may hold the ECB off from a larger-than-75bp hike in the hope a deal can be agreed to stop inflation reaching even more extreme levels.
- Elsewhere today we also receive Swedish confidence data, Spanish retail sales, Italian industrial sales, UK money supply/credit data, European confidence data and US conference Board / JOLTS / housing data.
- In addition we will have comments from ECB's Vasle, Holzmann, Stournaras, Wunsch, the Fed's Barkin and Williams and the Riksbank's Ingves.
USDCAD TECHS: Bear Cycle Still In Play
Aug-30 05:55
- RES 4: 0.7137 High Aug 11
- RES 3: 0.7040 High Aug 16
- RES 2: 0.7009 High Aug 26 and a key short-term resistance
- RES 1: 0.6944/60 20- and 50-day EMA values
- PRICE: 0.6901 @ 06:54 BST Aug 30
- SUP 1: 0.6841 Low Aug 29
- SUP 2: 0.6789 76.4% retracement of the Jul 14 - Aug 11 upleg
- SUP 3: 0.6719 Low Jul 15
- SUP 4: 0.6682 14 and the bear trigger
A bearish threat in AUDUSD firmed Friday following a sharp reversal from the intraday high of 0.7009. Monday’s initial move lower marked a bearish start to the week and this resulted in a break of support at 0.6856, the Aug 23 low and highlights a resumption of the bear cycle that started Aug 11. Attention is on 0.6789, a Fibonacci retracement. On the upside, key short-term resistance has been defined at 0.7009, Aug 26 high.
