FOREX: Greenback Reverses Early Gains, USDCAD Slides Back Below 1.4000
Oct-22 17:50
- Initial price action on Wednesday was once again constructive for the dollar, allowing the DXY to extend its rally this week. However, this sentiment steadily reversed across US hours, with the index slipping into negative territory approaching the APAC crossover. Currency market drivers have been few and far between, with most pointing to some short-term positioning squaring as we approach the US CPI report on Friday.
- Late source reports that the US is considering curbs on exports to China made with US software negatively impacted risk sentiment for a brief time, with equity prices sharply plumbing new lows, however there was little lasting impact on currencies.
- GBP was in the spotlight early, following a softer-than-expected CPI report that subsequently weighed firmly on sterling. GBPUSD fell from around 1.3380 down to 1.3306, strengthening the narrative that the recent recovery in the pair appears corrective. Key support and the bear trigger lies at 1.3249, the Oct 14 low. A break of it would resume the recent bear leg.
- Elsewhere, the Canadian dollar modestly outperforms in G10, helping USDCAD slide back below the 1.40 mark. Spot traded down to initial support at the 20-day EMA, intersecting at 1.3976. A close below the average will be monitored in coming sessions, with Canadian retail sales data due tomorrow.
- Risk in EURSEK remains tilted to the downside, with spot hovering just above support at 10.9036, the Sep 15 low. Clearance of this level would expose the April 4 low at 10.7941. Spot is on track for a sixth consecutive close lower, currently -0.10% today.
- Ahead of tomorrow's inaugural SNB meeting minutes, EURCHF consolidates yesterday's bounce from key clustered support between 0.9206/21. Tomorrow's minutes will signal how far the SNB was away from cutting into negative territory in September, and we specifically look for any indication of whether Schlegel's decision not to mention of negative side effects of NIRP was a deliberate move.
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US 10YR FUTURE TECHS: (Z5) Corrective Pullback
Sep-22 17:47
- RES 4: 114-15 1.0% 10-dma envelope
- RES 3: 114-10 High Apr 7 (cont.)
- RES 2: 114-00 Round number resistance
- RES 1: 113-12/29 High Sep 18 / High Sep 11 and the bull trigger
- PRICE: 112-24+ @ 18:37 BST Sep 22
- SUP 1: 112-21+/112-15+ Intraday low / High Aug 5 and 14
- SUP 2: 112-08+ 50-day EMA
- SUP 3: 111-13+ Low Aug 18 and a key support
- SUP 4: 110-25 Low Aug 1
The pullback in Treasury futures from their recent highs appear corrective. Price has moved through the 20-day EMA, at 112-28+. The break signals scope for a deeper retracement and attention turns to the 50-day EMA, at 112-08+ and the next key support. Moving average studies remain in a bull mode position, highlighting a dominant uptrend. The bull trigger has been defined at 113-29, the Sep 11 high.
US TSY OPTIONS: Update: 10Y Calls
Sep-22 17:30
- over -7,500 TYX5 113.5/114.5/115.5 1x3x2 call flys, collecting 2 on the package (total volume on the 114.5 call over 40k)
- Meanwhile, over +155,000 TYV5 114 calls, 31-33 ref 112-27 to -24.5
PIPELINE: Corporate Bond Update: $4.5B Dell 4Pt Launched
Sep-22 17:19
- Date $MM Issuer (Priced *, Launch #)
- 09/22 $4.5B #Dell $750M +3Y +58, $1.25B +5Y +80, $1.25B 7Y +90, $1.25B +10Y +100
- 09/22 $1.5B #Royal Caribbean 10Y +125
- 09/22 $1.5B #CBA $750M each: 5Y +45, 5Y SOFR+78
- 09/22 $1.2B #Aercap Ireland $600M each 5Y +75, 10Y +97
- 09/22 $900M #AEP Texas $150M 2034 Tap +97, $750M 30Y +112
- 09/22 $700M Mineral Resources 5.5NC2.5 7.25%a
- 09/22 $500M #Isbank WNG 10.5NC5.5 7.375%
- 09/22 $500M Science Applications 8NC3
- 09/22 $Benchmark Broadcom 5Y +85, +10Y +100, +12Y +110a
- 09/22 $Benchmark Korea National Oil 3Y fix/SOFR, 5Y
- 09/22 $Benchmark Embraer Netherlands +12Y +155a
