CHILE: Goldman Sachs Comment on Reserve Accumulation Program
Aug-06 11:06
- While Goldman Sachs had anticipated that the central bank would eventually want to resume its reserve accumulation program the MPC had suspended in October 2023, the announcement comes earlier than they expected and could also come as a surprise to some market participants.
- Goldman note that they had expected the central bank would be inclined to bring the monetary policy stance to neutral before starting a new program - the policy rate currently sits at 4.75% and the central bank estimates the nominal neutral interest rate to fall in a range between 3.5-4.5%. They say the program is also more ambitious than the one launched two years ago, although the daily impact on the market will be more limited.
- While in Goldman’s assessment the decision announced might signal that the central bank is comfortable with the level of the exchange rate, a sharp weakening of the currency could, in their view, limit additional near-term monetary policy easing.
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SOFR OPTIONS: BLOCK: Oct'25 SOFR Call condor
Jul-07 11:03
- 5,000 SFRV5 96.12/96.18/96.31/96.43 broken call condors, 0.0 net ref 96.18 at 0634:55ET
US TSYS: Back From Holiday, Bonds Under Pressure, Midweek FOMC Minutes
Jul-07 10:59
- Treasuries looking mixed as US markets resume after extended 4th of July holiday, curves steeper with 10s to Bonds weaker vs mildly higher 2s-5s at the moment (2s10s curve +2.023 at 47.984, 5s30s +2.475 at 94.849), Tsy 10Y yield +.0079 at 4.3537% (4.3201 Low / 4.3556 High).
- At the moment, Sep'25 10Y contract trades -2 at 111-05 - recent overnight low, above key technical support at 110-31, the 50-day EMA, and the Jul 3 low. A clear break of this average would signal scope for a deeper correction and highlight a possible reversal.
- For bulls, a resumption of gains would open 112-15, the 61.8% retracement of the Apr 7 - 11 steep sell-off. Initial resistance is at 111-28, the Jul 3 high.
- No economic data or Fed speakers scheduled today, US Treasury will be auctioning $82B 13W & $73B 26W bills at 1130ET.
- Relatively light data calendar compared to last week, focus is on the release of FOMC minutes for the June 18 meeting this Wednesday at 1400ET.
OUTLOOK: Price Signal Summary - Bear Threat In WTI Remains Present
Jul-07 10:53
- On the commodity front, Gold is trading lower today. Recent weakness resulted in a breach of the 50-day EMA, and a trendline drawn from the Dec 30 ‘24 low and connected to the Feb 28 low. A clear break of both trend tools would signal scope for a deeper correction, and open $3245.5, May 29 low. Note that the latest recovery highlights a possible false trendline break. A resumption of gains would refocus attention on $3451.3, the Jun 16 high. The bear trigger is $3248.7, the Jun 30 low.
- In the oil space, WTI futures maintain a softer tone following the reversal from the Jun 23 high. Recent gains appear corrective. Support to watch is the 50-day EMA, at $64.84. It has been pierced, a clear break of it would signal scope for a deeper retracement. This would expose $58.87, the May 30 low. Initial resistance to watch is $71.20, the 50.0% retracement of the Jun 23 - 24 high-low range. Key resistance is at $78.40, the Jun 23 high.
