MNI EXCLUSIVE: ISM Services Chair On U.S. Sector Outlook

• RES 4: 152.31 High Feb 19 
• RES 3: 151.62 61.8% retracement of the Jan 10 - Apr 22 bear leg 
• RES 2: 151.21 High Mar 28 
• RES 1: 150.92 Intraday high 
• PRICE: 147.56 @ 16:49 BST Aug 5
• SUP 1: 146.62 Low Aug 5
• SUP 2: 146.56 50-day EMA
• SUP 3: 146.53 1.0% 10-dma envelope
• SUP 4: 145.86 Low Jul 24  

USDJPY reversed sharply from Friday’s intraday high and this is allowing a short-term overbought condition to unwind. While the pullback in prices Friday may have been corrective, the break and close below 147.63, the 20-day EMA, is a concern. A clear break of this support zone would undermine the recent bull theme. A break of last week’s 150.92 high would resume the uptrend.

Released yesterday at 1400ET having been made available at last week’s FOMC meeting, the July Senior Loan Officer Opinion Survey (SLOOS) generally showed little change/a further tightening in lending standards in Q2 whilst loan demand was mixed. These are relatively small moves compared to those seen quarter-to-quarter during the pandemic and earlier in the post-pandemic period. 

• For those lending to businesses in Q2, “survey respondents reported, on balance, tighter lending standards and weaker demand for commercial and industrial (C&I) loans to firms of all sizes. Furthermore, banks generally reported tighter standards and weaker demand for commercial real estate (CRE) loans.”
• The tightening in C&I loans was most pronounced for large & medium firms as it accelerated further after a brief pause back in Q4. The 18.5% net tightening of standards was the largest since late 2023.  
• For those lending to households, “banks reported basically unchanged lending standards and weaker demand for residential mortgage loans, on balance. In addition, banks reported tighter lending standards and stronger demand for home equity lines of credit (HELOCs). For consumer loans, standards tightened for credit card loans and remained basically unchanged for auto and other consumer loans. Meanwhile, demand weakened for credit card and other consumer loans and strengthened for auto loans.”
• Respondents for commercial & industrial loans saw some of the largest moves on the quarter:

• 6,500 SFRZ5 95.68 puts, 0.75 ref 96.245 at 1408:46ET