ECB: Kazaks Re-iterate That Near-term Rate Cut Unlikely
Nov-27 11:43
Headlines from ECB's Kazaks via Reuters:
- "ECB'S KAZAKS: TIME IS NOT RIPE TO DISCUSS RATE CUT"
- "I WOULD FOCUS ON 2026, 2027 INFLATION PROJECTIONS"
- "DELAY TO ETS2 EMISSIONS TRADING SYSTEM WOULD FLATTEN INFLATION BUT WE SHOULD ALSO LOOK AT CORE"
Unchanged rhetoric from Kazaks here - not surprising given the lack of meaningful surprises in regional data since the October decision.
- Kazaks noted on November 14 that "“The information currently available suggests that the current level of interest rates is in line with inflation"
- He also told the MNI Policy Team on Nov 7 that “In December, we will see one more year added to our forecast and inflation outlook, and that is going to be a very important data to look at, but don't over emphasise it,” ....“Don't ignore the 2028 forecast, but don't take it as a major reason for decision making.”
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OUTLOOK: Price Signal Summary - Pullback In USDJPY Appears Corrective
Oct-28 11:43
- In FX, support in EURUSD remains intact. The level to watch is 1.1542, the Oct 9 low. A break of this support is required to cancel a recent bullish signal and this would confirm a resumption of the bear cycle that started on Sep 17. A breach would open 1.1516, the 76.4% retracement of the Aug 1 - Sep 17 bull leg, and expose key support at 1.1392, the Aug 1 low. Price needs to trade above 1.1728, the Oct 17 high, to strengthen a bull theme.
- A bear threat in GBPUSD remains present. Recent weakness highlights the end of the corrective bounce between Oct 14 - 17. A resumption of the downleg would expose key short-term support at 1.3249, the Oct 14 low and a bear trigger. Clearance of this level would resume the downleg that has been in place since Sep 17. Key near-term resistance is at 1.3471, the Oct 17 high. A break of this hurdle would instead signal a possible reversal.
- A bull cycle in USDJPY remains intact and short-term weakness is considered corrective. Attention is on key resistance at 153.27, the Oct 10 high and a bull trigger. Clearance of this hurdle would confirm a resumption of the medium-term uptrend. This would open 153.82, a 1.618 projection of the Sep 17 - 26 - Oct 1 price swing. Note that MA studies are in a bull-mode position, highlighting a primary uptrend. First important support to watch lies at 151.09, the 20-day EMA.
FOREX: GBPAUD Threatens 2.03 Again, Sharp EURAUD Pullback from Resistance
Oct-28 11:40
- In the crosses, EURAUD has had an aggressive turnaround after matching a key resistance point on October 17 at 1.8160. Since then, the cross has moved steadily lower, renewing the focus on a significant area of support just below the 1.76 handle. With the ECB decision not expected to bring any surprises, market focus will be on the swathe of data due later in the week, which includes both Q3 GDP and inflation prints across the Eurozone.
- In similar vein, sterling weakness today looks set to extend the losing streak for GBPAUD (shown below) to five consecutive sessions. The market will look for a sustained breach of the pivotal 2.03 mark, which would add weight to the developing bearish theme. A break of the October 10 lows at 2.0244 would signal scope for a more protracted selloff to the year’s lows around 1.96, not inconceivable given the risks surrounding the upcoming UK budget.
- For AUDJPY, the ongoing strength for major equity benchmarks has underpinned a resilient rally since April, culminating with the cross testing above 100.00 again on Monday. While we have traded up to a high of 100.94 in recent weeks, it is notable that we have only had three daily closes above the psychological 100 mark, dating back to November last year. Support is found at the 97.91, the 50-day EMA, while renewed strength and a sustained move above 100 would target the US election related highs at 102.41.
EGB SYNDICATION: Finland 5-year USD: Final Terms
Oct-28 11:37
- Final terms: MS+37bps (guidance was SOFR MS+38bps area, IPTs were SOFR MS (S/A, 30/360) +40bp area (~CT5+9.6bps / ~ WI+9.9bps))
- Size: USD1.5bln (MNI expected USD1.0-1.5bln)
- Books in excess of USD4bn (inc. $250m JLM)
- Maturity: 4 November 2030
- Settlement: 4 November 2025 (T+5)
- Bookrunners: Barclays / HSBC / Nomura / Societe Generale
- CUSIP/ISIN: XS3222747936 / US317873BJ59
- Timing: EMEA/Asia books closed at 10:45am LDN / 11:45am CET. Americas books to close at 8:30am NY.
From market source / MNI colour
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