TURKEY: Karahan Remains Upbeat on Inflation Despite Some Calls for Smaller Cuts

French private payrolled employment growth was flat in Q2, according to INSEE’s flash data. That’s a marginal improvement from the -0.1% Q/Q in Q1 and -0.4% Q/Q in Q4 2024. However, on an annual basis private payrolls remain down 0.4% Y/Y. 

• The EC’s expected employment indicator has bottomed out in recent months (low of 91.0 in May, rising to 92.9 in June and 93.2 in July), but further data is needed to signal scope for a return to positive sequential employment growth.
• Across industries, agriculture (-1.6% Q/Q), industry (-0.1% Q/Q) and construction (-0.5% Q/Q) saw sequential falls in payrolled employment in Q2. Meanwhile, market-based tertiary sector employment growth was flat, with non-market tertiary sector growth rising 0.2% Q/Q. 

As expected a gap higher for the Cash Estoxx (SX5E) but also just short of the noted 50% retracement level at 5287.23, so far managed a 5277.39 high.

(Chart source: Bloomberg Finance LP/MNI).

• RES 4: 1.4111 Apr 10  
• RES 3: 1.4019 38.2% retracement of the Feb 3 - Jun 16 bear leg 
• RES 2: 1.3920 High May 21
• RES 1: 1.3879 High Aug 1
• PRICE: 1.3768 @ 07:57 BST Aug 6
• SUP 1: 1.3732/3557 20-day EMA / Low Jul 03
• SUP 2: 1.3540 Low Jun 16 and the bear trigger
• SUP 3: 1.3503 1.618 proj of the Feb 3 - 14 - Mar 4 price swing
• SUP 4: 1.3473 Low Oct 2 2024

A short-term bullish corrective phase in USDCAD remains in play despite sharp weakness Friday. On the recent run higher, price traded through the 50-day EMA at 1.3743 and this has been followed by a break of resistance at 1.3798, the Jun 23 high. Clearance of 1.3798 represents an important short-term bullish development, signaling scope for a stronger recovery. Sights are on 1.3920 next, the May 21 high. On the downside, initial firm support to watch lies at 1.3732, the 20-day EMA.