US TSYS: June FOMC Minutes Signal July Hold, Forward Options Open
Jul-09 20:00
- Treasuries look to finish near late session highs, little new from the June FOMC minutes with members signaling a July hold while keeping futures policy options open. The June meeting minutes captured a Committee that was leaning in a slightly more hawkish direction than earlier in the year, though probably no more than should have been expected.
- The Dot Plot released at the meeting already captured most of the story: a divided Committee retains its overall easing bias but needs varying degrees of certainty before supporting a resumption of the easing cycle.
- Overall, "participants noted that the progress in returning inflation to target had continued even though that progress had been uneven" (and in a nod to the hawks and perhaps a little surprising given decent inflation readings, "a few participants noted that there had been limited progress recently in reducing core inflation.").
- Tsy Sep'25 10Y futures are currently +15.5 at 111-08.5 vs. 111-10 session high (below 111-12 high on Monday) technical resistance to watch is at 111-28, the Jul 3 high. Curves mixed with the short end flatter: 2s10s -2.616 at 47.838.
- Projected rate cut pricing has gained momentum vs morning (*) levels: Jul'25 at -1.7bp (-1.2bp), Sep'25 at -18.6bp (-17.3bp), Oct'25 at -33.7bp (-31.7bp), Dec'25 at 52bp (-49.3bp).
- Cross asset roundup: USD inching lower, Bbg index BBDXY -0.11 at 1196.53; US stocks firmer but off early session highs: SPX eminis +35.5 at 6307.5, Gold firmer (+13.19 at 3315.11), crude mildly lower (WTI -0.07 at 68.26).
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USDCAD TECHS: Trend Needle Points South
Jun-09 20:00
- RES 4: 1.4200 Round number resistance
- RES 3: 1.4111 High Apr 4
- RES 2: 1.3909/1.4016 50-day EMA / High May 12 and 13
- RES 1: 1.3791 20-day EMA
- PRICE: 1.3684 @ 16:07 BST Jun 9
- SUP 1: 1.3611 Low Oct 8 2024
- SUP 2: 1.3579 1.500 proj of the Feb 3 - 14 - Mar 4 price swing
- SUP 3: 1.3503 1.618 proj of the Feb 3 - 14 - Mar 4 price swing
- SUP 4: 1.3473 Low Oct 2 2024
The trend structure in USDCAD remains bearish and the pair traded lower last Thursday, to a fresh cycle low. Support at 1.3686, the May 26 low and a bear trigger, has been cleared. This confirms a resumption of the downtrend and maintains the price sequence of lower lows and lower highs. Sights are on 1.3579 next, a Fibonacci projection. Resistance at the 50-day EMA is at 1.3909 - a key level. The 20- EMA is at 1.3791.
US TSYS: US Marines Deployed to Los Angeles
Jun-09 19:54
- Muted reaction so far, stocks pared gains after wires reported a battalion of Marines (appr 500) to be deployed to Los Angeles.
US OUTLOOK/OPINION: Copy - BofA On Softer Side Of Core CPI Consensus
Jun-09 19:47
- BofA expect core CPI inflation at 0.24% M/M in May which lifts the Y/Y a tenth to 2.9%.
- “We expect to see more signs of tariffs driving prices higher, but favorable seasonal factors for autos and declines in certain services categories will keep a lid on the top line inflation numbers.”
- “We forecast core goods inflation of 0.2% m/m in May, an acceleration from the 0.1% m/m print in April. Tariffs should have a broader impact on the data than last month, where the clearest sign of tariff-driven price hikes was the 8.8% m/m spike in audio equipment. However, new and used vehicle prices will likely fall due in part to seasonal factors.” Core goods ex new & used cars seen at 0.3% M/M.
- They see core services at 0.3% M/M for a second consecutive month. “Like last month, discretionary services-lodging away from home and airfares- prices likely fell. Rent and OER inflation should be little changed.
- Headline CPI is seen at 0.16% M/M to push the Y/Y a tenth higher at 2.4%.
- BofA currently see core PCE at 0.21% M/M, which would see the Y/Y “rounding up to 2.7% from 2.5%, given the unfavorable base effects from last May.”
