GBP: GBP/USD Still Struggling Above 1.34 Pre-CPI
May-20 10:47
The GBP trend condition is undoubtedly positive, with the pick-up in the S/T upside trend for spot evident in the growing premium of the 50-dma over the 200-dma - which now sits at its widest since October last year. This keeps the $1.3400 handle in focus, a level that markets have had difficulty in sustaining a move above on several occasions this year, as well as in 2019, 2020 and 2024. The keeps focus on the bearish tweezer candle formation printed on April 28/29, which could mark a near-term top.
- Overnight GBP vols have ticked higher ahead of the print, and now clear 10 vol points against the USD and 7 points against the EUR - although outright implied remains well below recent tariff-tripped highs. We see EUR/GBP vols as a cleaner read, which post a near 3 point vol premium into the CPI print - the largest pre-UK CPI premium of the year so far.
- As a result, a downside surprise for CPI tomorrow could see a correction lower of decent size, particularly as the market maintains a net long GBP position which, while off the year's best levels, still accounts for a net of 14.0% of open interest.
- 1.3342 undercuts as first support, ahead of the more meaningful 50-day EMA at 1.3126. A move through here would challenge the near-term bullish trend narrative.
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CARNEY ELECTION PLATFORM HAS CAD225B OF DEFICITS OVER FOUR YRS
Apr-19 13:51
- CARNEY ELECTION PLATFORM HAS CAD225B OF DEFICITS OVER FOUR YRS
- CARNEY SEES 2025-26 BUDGET DEFICIT OF CAD62.3B OR 2% OF GDP
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LOOK AHEAD: Eurozone Timeline of Key Events (Times BST)
Apr-18 05:18
| Date | Time | Country | Event |
| 25-Apr | 0745 | FR | Manufacturing Sentiment |
| 29-Apr | 0700 | DE | GFK Consumer Climate |
| 29-Apr | 0800 | ES | HICP (p) / GDP |
| 29-Apr | 0900 | EU | M3 / Consumer Expectations Survey |
| 29-Apr | 0900 | IT | ISTAT Confidence Indices |
| 29-Apr | 1000 | EU | Consumer Confidence, Industrial Sentiment |
| 30-Apr | 0630 | FR | GDP (p) / Consumer Spending |
| 30-Apr | 0700 | DE | Import/Export Prices / Retail Sales |
| 30-Apr | 0745 | FR | HICP (p) / PPI |
| 30-Apr | 0855 | DE | Unemployment |
| 30-Apr | 0900 | DE | GDP (p) / State level CPI |
| 30-Apr | 0900 | IT | GDP (p) |
| 30-Apr | 1000 | EU | GDP preliminary flash est. |
| 30-Apr | 1000 | IT | HICP (p) |
| 30-Apr | 1100 | IT | PPI |
| 30-Apr | 1300 | DE | HICP (p) |
JGBS: Twist-Steepener Holds Going Into W/E, BoJ Gov Ueda Reiterates Caution
Apr-18 05:16
JGB futures are stronger, +18 compared to settlement levels, sitting near the middle of the range after a choppy session.
- “Governor Kazuo Ueda reiterates his stance that the central bank will carefully monitor if its economic outlook will be realized, accounting for the effects of US tariff measures, without preconception. The BoJ will raise the benchmark rate if the outlook is realized, Ueda says in response to questions in parliament.” (per BBG)
- “Fukoku Mutual Life Insurance Co. plans to invest in Japan's super-long government bonds this fiscal year after their yields skyrocketed. The company aims to increase domestic government bond holdings by ¥30 billion, with gross purchases potentially reaching ¥300-400 billion.” (per BBG)
- Earlier today, Headline CPI for March showed +3.6% y/y versus +3.7% estimate. Core and Core-Core printed +3.2% y/y and +2.9% y/y, respectively, versus estimates of +3.2% and +2.9% and priors +3.0% and +2.6%.
- Cash US tsys are closed today for the Good Friday holiday.
- Cash JGBs have twist-steepened, pivoting at the 20-year, with yields 2bps lower to 5bps higher.
- Swap rates are 2bps lower to 2bps higher, with a steepening bias.
- On Monday, the local calendar will see Tokyo Condominiums for Sale data.
