USDCAD TECHS: Key Support Still Exposed
Mar-30 13:15
- RES 4: 1.2778 High Mar 16
- RES 3: 1.2699 High Mar 17
- RES 2: 1.2667 50-day EMA
- RES 1: 1.2593/2625 High Mar 28 / 20-day EMA
- PRICE: 1.2489 @ 06:53 GMT Mar 30
- SUP 1: 1.2466 Low Mar 25
- SUP 2: 1.2454 Low Jan 19 and a key support
- SUP 3: 1.2387 Low Nov 10 2021
- SUP 4: 1.2328 Low Oct 29 2021
Trend conditions in USDCAD still appear bearish and the pair remains closer to its recent lows. Recent weakness and most recently, a break of 1.2552, 76.4% of the Jan 19 - Feb 24 rally, reinforced a bearish theme and signals scope for a continuation lower. The focus is on the next key support at 1.2451, Jan 19 low. On the upside, initial firm resistance is seen at 1.2625, the 20-day EMA. A break of this average would ease bearish pressure.
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BONDS: EU Roll update
Feb-28 13:12
- Buxl: 16%
- Bund: 10% (way below pace)
- Bobl: 9% (below pace)
- Schatz: 13%
- BTP: 11%
- BTPS: 10%
- OAT; 15%
What to Watch:
Feb-28 13:08
Volatile overnight trade, heavy volumes as Russia/Ukraine crisis deepens, rates well bid but off initial gap-bid highs.
- Headline watching: Russian nuclear forces placed on enhanced combat duty rattling mkts. Piling on sanctions: US, EU, France, Germany, Italy, UK and Canada agreed to bar select Russia banks access to SWIFT network Saturday. Several EU countries close airspace to Russia flights. Meanwhile: US SENDING DELEGATION OF FORMER SENIOR DEFENSE AND SECURITY OFFICIALS TO TAIWAN ON MONDAY, Rtrs.
- Economic data at 0830ET:
- Advance Goods Trade Balance (-$100.5B rev, -$99.3B)
- Wholesale Inventories MoM (2.2%, 1.2%)
- Retail Inventories MoM (4.4%, --)
- At 0945ET: MNI Chicago PMI (65.2, 62.0)
- At 1030ET: Dallas Fed Manf. Activity (2.0, 3.5)
- Fed speak at 1030ET: Atlanta Fed Bostic, moderated virtual discussion on U.S. economy hosted by Harvard, no text but will have audience Q&A
- US Tsy bill auctions at 1130ET: $60B 13W, $51B 26W
- Later in week: Fed Chair Powell semi-annual mon/pol testimony to House Financial Services Comm on Wed, Senate Banking Comm Thu both 1000ET
- Feb nonfarm payrolls Friday (+467k, +400k)
CANADA: Modest Version Of Rally In Treasuries Continues
Feb-28 13:06
- GoCs have re-gathered their strength after opening firmly, with front end belly yields 3-4bps lower and long end yields down 1.5-2.5bps.
- The slope of the yield curve remains historically close to that of Tsys, with the 2YY of 1.504% near parity and the 10YY only 5bp lower at 1.868%.
- Coming ahead of the BOC on Wed, GoCs have provided some recent easing in financial conditions with 10YY 11bps off highs.
- The 2s10s of 36bps is just off recent flats though, last seen in Nov-2020, highlighting the difficulty in controlling high inflation without weighing excessively on medium-term growth.
Canada G0C 2s10s Source: Bloomberg
