EUROPEAN INFLATION: French Services Lead Softer CPI Inflation In August Flash
Aug-29 06:45
France HICP inflation was marginally softer than expected in the preliminary August release although national CPI inflation was more clearly softer than expected, led by transportation services.
- HICP inflation eased to 0.83% Y/Y (BBG cons 0.9, MNI median of a narrower pool of analysts 0.8) in the August preliminary release after 0.94% Y/Y in July.
- The 0.48% M/M matched with Bloomberg consensus of 0.5% after 0.28% M/M in July.
- CPI inflation was more clearly softer than expected at 0.88% Y/Y (cons 1.0) in the Aug prelim after 1.00% Y/Y in July.
- The 0.41% M/M was softer than Bloomberg consensus of 0.5% after 0.21% M/M in July.
- It came as CPI services, an area of continued focus, eased more notably to 2.14% Y/Y from 2.49% Y/Y in July. The press release notes a particular slowdown in transportation.
- Aside from the likely Easter distortion related 2.09% Y/Y in May, it’s the softest services inflation print since Jan 2022.
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BONDS: The Italian BTP leads the way lower
Jul-30 06:41
- Not too surprising, the BTP leads the way to the downside, helping Bund and OAT through their earlier intraday lows.
- Italy sees a heavy early supply, and Yesterday's low of 120.43 will present the small initial support.
- The early price action is keeping the Italy/Germany 10yr spread a touch wider, with the 80.00bps level finding some demand Yesterday and Today.
USD: First red start in over 5 Days
Jul-30 06:34
- The first red start for the Dollar in over 5 days, some small unwind ahead of the FOMC, after Market Participants have been looking for the Fed to keep its Hawkish stance later Today.
- The Yen was the earlier best performer going into the European session, but there's been a tiny shift in early trade, while the Yen is still up 0.30%, the Dollar sits closer to flat against the rest of G10s.
- The AUD only had a 26 pips drop following the lower inflation reading overnight as the Street clearly awaits the bigger Data and Risk Event (FOMC).
- AUDUSD fell down to a 0.6503 low post CPI Data but didn't quite challenge Yesterday's low at 0.6496.
- Nonetheless, some Investors will now start to look for a potential RBA Rate cut at their next meeting due on the 12th August.
AUDUSD TECHS: Testing Support
Jul-30 06:34
- RES 4: 0.6700 76.4% retracement of the Sep 30 ‘24 - Apr 9 bear leg
- RES 3: 0.6688 High Nov 7 ‘24
- RES 2: 0.6677 0.764 proj of the Jun 23 - Jul 11 - 17 price swing
- RES 1: 0.6625 High Jul 24 and the bull trigger
- PRICE: 0.6512 @ 07:33 BST Jul 30
- SUP 1: 0.6505/6496 50-day EMA / Intraday low
- SUP 2: 0.6455 Low Jul 17
- SUP 3: 0.6373 Low Jun 23 and a bear trigger
- SUP 4: 0.6357 Low May 12
Recent gains in AUDUSD reinforce bullish conditions and the latest pullback appears corrective. Support to watch is at the 50-day EMA, at 0.6505. It has been pierced, a clear break of this average would highlight a stronger reversal, exposing 0.6455, the Jul 17 low. For bulls, a resumption of gains would refocus attention on 0.6625, the Jul 24 high. Clearance of this level would resume the uptrend and open 0.6688, the Nov 7’ 24 high.
