BUNDS: Focus turns to Data release
Sep-30 06:16
- Bund is ticking higher, back towards flat on the session, since the cash open.
- Overnight session has been more stable ahead of the prelim CPIs releases this morning.
- Resistance moves down to 137.84, while support is seen at 136.62.
- There's a fair amount of data for today, French, Italian, and EU prelim CPIs. Out of the US, PCE core deflator, MNI Chic PMI, and more importantly the prelim Michigan.
- SPEAKERS: Unlikely to learn anything new following a packed week, today includes, ECB Elderson, Visco, Schnabel, Fed Brainard, Barkin, Williams.
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EURJPY TECHS: Pierces Trendline Resistance
Aug-31 06:15
- RES 4: 140.69 High Jul 22
- RES 3: 140.21 76.4% retracement of the Jul 21 - Aug 2 downleg
- RES 2: 140.04 2.0% 10-dma envelope
- RES 1: 139.22 High Aug 29
- PRICE: 139.19 @ 17:14 BST Aug 30
- SUP 1: 138.93 Low Aug 30
- SUP 2: 135.52/34.95 Low Aug 24 / 16
- SUP 3: 133.40 Low Aug 2 and a bear trigger
- SUP 4: 132.66 Low May 12 and a key support
EURJPY traded higher again Tuesday. This week’s climb has resulted in a break of the 50-day EMA. The cross has also pierced 138.98, trendline resistance drawn from the Jun 28 high. This represents a key resistance area and a clear break would strengthen bullish conditions and highlight a stronger reversal. A break would open 140.04, 2.0% 10-dma envelope. Initial support is seen at 137.03, the Aug 29 low.
GILTS: FQ3 Operations calendar due for release at 7:30BST
Aug-31 06:09
A reminder that the DMO will release the gilt operations calendar for FQ3 (Oct-Dec) at 7:30BST this morning. We set out our expectations in the UK Issuance Deep Dive: FQ3: How will the gilt market cope with QT?
OUTLOOK: What to watch
Aug-31 06:05
- It will be another busy data day with the focus this morning again on inflation. We will receive French HICP data at 7:45BST / 8:45CET (median 6.7%Y/Y with a larger right-hand tail) ahead of Austrian, Slovenian and Portuguese prints. These all precede the pan-Eurozone print which is due for release at 10:00BST / 11:00CET (simultaneously with the Italian HICP print). The Bloomberg median for the Eurozone headline print looks for 9.0%Y/Y (a tenth higher than the 8.9%Y/Y print seen last month), but there are a number of economists looking in an 8.8-9.2% range. Core CPI has a median of 4.1%Y/Y, but with economists split between 3.9-4.3%Y/Y (from 4.0%Y/Y last month).
- The inflation print will be important as markets now price in 66bp for next week's ECB meeting (up from Thursday's close of 55bp after a hawkish Reuters sources story and Schnabel Jackson Hole speech) and 163bp by year-end (up from Thursday's close of 131bp).
- Elsewhere on the data front, the highlights will be this afternoon's MNI Chicago Business Barometer (due at 14:45BST / 15:45CET), the ADP employment report at 13:30BST / 14:30CET (with its new methodology) and Canadian GDP for June (and first print of Q2). Across the morning we will also have final prints of Q2 GDP from a number of Eurozone countries.
- Today's speakers include the Riksbank's Breman and the Fed's Mester. After European hours we will also hear from the Fed's Logan and Bostic.
