FED: Heading Into Its Final Weeks, QT Pace Remains At $20B/Month (2/2)
On the asset side of the Fed balance sheet, we saw a $25B drop in assets, of which just $2B could be...
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ASIA: Coming Up In Asia Pac Markets On Thursday
| 0050BST | 0750HKT | 1050AEST | Japan Offshore Weekly Investment Flows |
| 0100BST | 0800HKT | 1100AEST | Australia 2032 Inflation Linked Bond Sale |
| 0200BST | 0900HKT | 1200AEST | China Sep Swift Payments CNY |
Source: Bloomberg Finance L.P./MNI
US OUTLOOK/OPINION: Barclays At Top End Of Consensus For CPI
Barclays sit at the top end of unrounded analyst estimates we've seen for Friday's September CPI release, with core CPI seen at 0.36% M/M and headline at 0.43% M/M. As headlined in an earlier bullet, Goldman form the lower end of this unrounded estimate range with 0.25% M/M. Barclays expect similar strength through to Jan 2026 on elevated tariff pass-through.
- “September data quality should remain unaffected since collection finished before the shutdown, but prolonged closures may affect October data collection and quality.”
- “We expect the uptick to be led entirely by core goods prices, which we forecast at +0.4% m/m amid more tariff pass-through. If realized, this would mark the highest core goods inflation print since May 2023. We estimate that core services inflation eased to 0.3% m/m, amid less shelter inflation”.
- They eye 0.31% M/M for core PCE inflation, 9bp higher than August.
- “We expect fairly stable but elevated tariff pass-through in the coming months to keep core CPI rounding to 0.4% m/m through January 2026. While tariff pressures have been slow to materialize, they are catching up with the 2018-19 experience, and about 40% of the expected tariff-related price increases have materialized thus far.” They see core CPI at 3.5% Y/Y in Dec 2025 and 2.7% Y/Y in Dec 2026.
- They continue to see a 25bp cut in October before one more in December. “The trickle of pre-shutdown data releases and private data suggest more of the same for the labor market and spending.”
USDCAD TECHS: Corrective Pullback
- RES 4: 1.4200 Round number resistance
- RES 3: 1.4167 50.0% retracement of the Feb 3 - Jun 16 bear leg
- RES 2: 1.4111 High Apr 10
- RES 1: 1.4080 High Oct 16 and the bull trigger
- PRICE: 1.3998 @ 15:47 BST Oct 22
- SUP 1: 1.3976/3900 20- and 50-day EMA values
- SUP 2: 1.3821 Bull channel base drawn from the Jul 23 low
- SUP 3: 1.3727 Low Aug 29 and a bear trigger
- SUP 4: 1.3689 Low Jul 28
USDCAD has pulled back from its recent highs. The trend condition remains bullish and a move lower is considered corrective. Moving average studies are in a bull-mode position, highlighting a dominant uptrend. Sights are on 1.4111, the Apr 10 high, and further out, scope is seen for an extension towards 1.4167, a Fibonacci retracement. First key support lies at 1.3900, the 50-day EMA. Support at the 20-day EMA lies at 1.3976.
