CANADA DATA: Ivey PMI Adds To Improving Post-Q2 Economic Picture
July's Ivey PMI survey showed a solid pickup to 55.8 from 53.3 prior, marking a 12-month high and adding to evidence that Canadian economic activity looks to have troughed in Q2.
- The main subcomponents painted a slightly improving picture: employment rose 1.7 points to a 5-month high 51.2, while prices moderated 1.7 points albeit to a still-elevated 68.5 (4 of the prior months had been 70 or above).
- Inventories dipped below 50 for the first time since February (48.7 from 50.6), with supplier deliveries up above 50 (50.2, ie faster deliveries) for the first time in 16 months.
- July survey data have been solid overall, with the CFIB small business barometer and the S&P Global composite PMIs each hitting 6-month highs, suggesting sentiment has improved significantly after months of US-Canada trade conflict (albeit uncertainties remain with the US and Canada still negotiating a "deal".)
- We get Q2 GDP on Aug 28, with a moderate (-0.5% Q/Q SAAR) contraction expected by Bloomberg consensus.
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EURGBP TECHS: Holding On To Most Of Its Recent Gains
- RES 4: 0.8781 2.236 pro of the Mar 3 - 11 - 28 price swing
- RES 3: 0.8738 High Apr 11 high and a key resistance
- RES 2: 0.8694 High Apr 14
- RES 1: 0.8670 High Jul 02
- PRICE: 0.8630 @ 16:25 BST Jul 8
- SUP 1: 0.8597 Low Jul 7
- SUP 2: 0.8555/8507 20- and 50-day EMA values
- SUP 3: 0.8459 Low Jun 11
- SUP 4: 0.8407 Low Jun 4
The trend condition in EURGBP remains bullish and the cross is holding on to the bulk of its recent gains. Moving average studies are in a bull-mode position - highlighting a dominant uptrend. 0.8648, 76.4% of the Apr 11 - May 29 downleg, has been pierced. A continuation higher would further strengthen bullish conditions and open 0.8738, the Apr 11 high and a key resistance. Support to watch lies at 0.8555, the 20-day EMA.
PIPELINE: Corporate Bond Update: $2.25B American Honda 3Pt Launched
- Date $MM Issuer (Priced *, Launch #)
- 07/08 $3B *IADB (Inter-American Development Bank) 10Y SOFR+61
- 07/08 $2.25B #American Honda $900M 2Y +65, $600M 2Y SOFR+87, $750M 7Y +100
- 07/08 $Benchmark BFCM 3.25Y +72, 3.25Y SOFR+99
- 07/08 $750M Gray Media 7NC investor calls
- Potential roll-over from Monday:
- 07/?? $Benchmark Nissan Motor 5Y 7.25%a, 7Y 7.75%a, 10Y 8%a
- 07/?? $Benchmark NTT Finance Corp multi tranche investor calls: 2Y, 3Y fix/SOFR, 5Y fix/SOFR, 7Y, 10Y, 12Y -- in addition to EUR issuance 2Y, -4Y, 8Y and 12Y
GBPUSD TECHS: Pullback Considered Corrective
- RES 4: 1.3852 1.764 proj of the Feb 28 - Apr 3 - 7 price swing
- RES 3: 1.3835 High Oct 20 2021
- RES 2: 1.3800 Round number resistance
- RES 1: 1.3789 High Jul 01 and the bull trigger
- PRICE: 1.3568 @ 16:15 BST Jul 8
- SUP 1: 1.3526 Low Jul 08
- SUP 2: 1.3468 50-day EMA
- SUP 3: 1.3379 Trendline support drawn from the Jan 13 low
- SUP 4: 1.3245 Low May 19
A bull cycle in GBPUSD remains in play and recent weakness appears corrective. Support at 1.3602, the 20-day EMA, has been pierced. A clear break here would signal scope for a deeper correction towards the 50-day EMA at 1.3468. Key resistance and the bull trigger is at 1.3789, the Jul 1 high. Clearance of this hurdle would resume the uptrend. Note that MA studies are in a bull-mode position, suggesting the M/T uptrend is intact.
