US TSYS: Geo-Pol Headline Sensitive, Focus on Next Wk's CPI/PPI, Warsh Testimony

• RES 4: 0.7278 May 6 and the bull trigger
• RES 3: 0.7223 High May 15
• RES 2: 7201 High May 29 
• RES 1: 0.7129 20-day EMA
• PRICE: 0.7021 @ 17:12 BST Jun 10
• SUP 1: 0.6998 Low Jun 10
• SUP 2: 0.6986 Low Apr 13 
• SUP 3: 0.6938 76.4% retracement of the Mar 30 - May 6 bull leg 
• SUP 4: 0.6899 Low Apr 7 

A short-term bear cycle in AUDUSD remains in play. The pair has recently cleared the 50-day EMA, currently at 0.7118. The break of this average signals scope for a deeper retracement and opens 0.6986, the Apr 13 low. Note that the bear cycle that started Jun 5 could still be a correction. MOving average studies are in a bull-mode position highlighting a dominant uptrend. Key short-term resistance has been defined at 0.7201, the May 29 high.

• US Data/Speaker Calendar (prior, estimate). All times ET
• 06/11 0830 Initial Jobless Claims (225k, 220k)
• 06/11 0830 Continuing Claims (1.777M, 1.785M)
• 06/11 0830 PPI Final Demand MoM (1.4%, 0.7%), YoY (6.0%, 6.4%)
• 06/11 0830 PPI Ex Food and Energy MoM (1.0%, 0.5%), YoY (5.2%, 5.4%)
• 06/11 1130 US Tsy $70B 4W & $70B 8W bill
• 06/11 1300 US Tsy $22B 30Y Bond auction re-open (912810UU0)
• 06/11 1200 Household Change in Net Worth
• Source: Bloomberg Finance L.P. / MNI

Accordingly, analysts did not change their outlooks for BOC policy following June's meeting, with the overwhelming consensus being that there will be a hold through 2026 followed by 50bp in hikes in 2027, a path slightly less aggressive than portrayed by OIS markets. Some post-meeting notes in alphabetical order of institution (along with rate outlooks pre-meeting, presumed unchanged):

• BMO (Hold through 2026 and 2027): "Very little new information from the Bank of Canada, as the June policy statement and opening statement were similar to April's. The extra line about the economy being "weak" is a touch more dovish, but there's still concern about the potential for rising inflation from higher energy prices."
• CIBC (Hold through 2026, 50bp hikes in 2027): "We view today's communication as highlighting a very patient central bank that has plenty of time to wait and see how risks to the economy play out... rates at their current level should support a recovery in the economy later this year and into 2027 assuming some of the uncertainties regarding oil prices and trade lessen during that time period."
• Desjardins (Hold through 2026, 50bp hikes in H1 2027): "Given the two-sided risks to the inflation outlook, the Bank of Canada appears comfortable leaving rates on hold for now....That said, we believe the Bank is discounting some tailwinds to the Canadian economy."
• National (Hold through 2026, 50bp hikes in 2027): "Overall, the decision played out largely in line with our expectations but there was perhaps a slight dovish bias stemming from the Bank’s discussion of the economy. Indeed, there appeared to be more of a focus on current excess capacity and less emphaisis on their previously communicated expectation that this slack would be absorbed. In any case, the Bank believes that, for now, holding rates steady is the best way to balance both upside and downside risks to the outlook. Like markets, we view 2026 policy risks as skewed towards tightening and we don’t doubt the Bank’s resolve in ensuring price stability. However, we’d judge that the near-term hike scenario is growing less likely and we still expect the Bank to remain sidelined through year-end."
• RBC (Hold through 2026, 100bp hikes in 2027): "In short, their key message of staying prudent yet nimble was retained to preserve flexibility for a rate move if necessary...Much as we are, we think the BoC is adopting a wait-and-see approach to confirm the persistence of weaker-than-expected economic data since April, amid a highly volatile and revision-prone data environment."
• Scotiabank (50bp hikes in Q4, 25bp hike in early 2026): "The broad tone of the statement and Governor Macklem’s opening remarks to his press conference continue to suggest it is in monitoring mode, avoiding overreaction to any developments whatsoever and seeking further clarity on key risks to the inflation outlook. The overall communications were in line with expectations for now and ahead of a key second half of the year. The tone was neutral as they take in more information which is entirely as expected. Frankly, they could well have just cancelled the event. There was nothing new."
• TD (Hold through 2026, 50bp hikes in H1 2027): "the overriding sense we get from the last two announcements is that the Bank does not have a clear sense on the timing or direction of the next move in interest rates. Given the extraordinarily high degree of geopolitical uncertainty, this is probably a prudent approach."