EMERGING MARKETS: Global News: February 26
* US / IRAN (MNI) - Per Iran's semi-official ISNA, the latest round of indirect talks between the ...
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LOOK AHEAD: Tuesday Data Calendar: ADP NER Pulse, Cons Confidence, 5Y Note Sale
- US Data/Speaker Calendar (prior, estimate). All times ET
- 01/27 0815 ADP Weekly NER Pulse, +8k prior
- 01/27 0855 Redbook Retail Sales Index
- 01/27 0900 FHFA House Price Index MoM (0.4%, 0.3%)
- 01/27 0900 S&P Cotality CS 20-City MoM SA (0.32%, 0.22%), YoY (1.31%, 1.20%)
- 01/27 1000 Richmond Fed Mfg Index (-7, -5), Business Conditions (-11, -7)
- 01/27 1000 Conference Board Consumer Confidence (89.1, 91.0)
- 01/27 1030 Dallas Fed Services Activity (-3.3, -2.4)
- 01/27 1130 US Tsy $90B 6W bill auction
- 01/27 1300 US Tsy $70B 5Y Note auction (91282CPW5)
- Source: Bloomberg Finance L.P. / MNI
JAPAN: Lack Of Candidate Coordination Could Throw Up Unexpected Election Results
With the House of Representatives election campaign now formally underway, political parties have identified which of the 289 single-member constituencies in which they intend to run for the 8 February election. The identity of the parties contesting the single-member seats could prove crucial for the election outcome, given the shift in coalition alliances since the last vote in autumn 2024.
- In that vote, as with all elections since 1998, the conservative Liberal Democratic Party (LDP) formed an alliance with the centrist social conservative Komeito. This afforded the LDP Komeito's party activist network and the backing of the Soka Gakkai religious organisation. This time around, the LDP is in coalition with the libertarian regionalist Japan Innovation Party (Ishin), while Komeito has joined the Centrist Reform Alliance (CRA) with the main opposition Constitutional Democratic Party (CDP).
- In the 8 Feb election, the LDP and Ishin will compete against one another in 85 constituencies despite sitting together in gov't, risking a split vote that allows opposition parties to win on a relatively low vote share.
- In 228 seats, six parties will contest the vote, further raising the prospect of winners emerging on low vote shares. The LDP and CRA will effectively go head-to-head with no other major opposition candidates running in just 28 seats.
- Efforts among the opposition to coordinate have also failed. The conservative populist Democratic Party for the People refused CRA overtures, and they will compete with one another in 46 seats. The far-left Communist Party of Japan, which had in the past loosely coordinated with the centre-left CDP, said that after linking up with Komeito, "the foundation for cooperation has been destroyed."
US 10YR FUTURE TECHS: (H6) Gains Considered Corrective
- RES 4: 112-31 High Dec 18 and key short-term resistance
- RES 3: 112-22 High Jan 7
- RES 2: 112-11 50-day EMA
- RES 1: 112-02 20-day EMA
- PRICE: 111-24+ @ 10:38 GMT Jan 27
- SUP 1: 111-09 Low Jan 10 and the bear trigger
- SUP 2: 111-00 Round number support
- SUP 3: 110-30+ 1.618 proj of the Oct 17 - Nov 5 - 25 price swing
- SUP 4: 110-22+ 1.764 proj of the Oct 17 - Nov 5 - 25 price swing
Treasuries have recovered from their recent lows. A bear theme remains intact and short-term gains are considered corrective. Initial firm resistance is at the 20-day EMA, currently at 112-02. The 50-day EMA is at 112-11. The area between the 20- and 50-day averages represents a key resistance zone. For bears, a resumption of the bear leg would refocus attention on the bear trigger at 111-09, the Jan 10 low.
