NBP: Kotecki Comments Suggest Resistance Against Assuming More Cuts
Dec-10 11:59
"POLISH C.BANKER KOTECKI SAYS INFLATION SHOULD REMAIN WITHIN 2.5-3% RANGE WITHIN COMING MONTHS, SAYS COMING MONTHS TO RATHER BE "WAIT AND SEE" THAN FURTHER RATE CUTS" - RTRS
- Kotecki's views on inflation inline with his pre-December NBP meeting views - and that inflation forecast is well within the NBP's view range of 1.9 - 4.0% for 2026.
- His comments on rates are worth noting and may suggest some resistance against assuming another rate cut - today he says "wait-and-see" whereas he saw potential for rate cuts to continue (and then end) in the first few months of 2026 just a few weeks ago.
- With December's cut to 4.00%, the NBP are now within range of his view for near-term rates: “It will definitely be in the first half of next year, maybe even in the first quarter, with interest rates in the range of 3.75%-4.00% — maybe even closer to 3.75%,”
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OUTLOOK: Price Signal Summary - Key Support In Gold Remains Intact
Nov-10 11:54
- On the commodity front, the downleg in Gold that started Oct 20 appears to have been a correction and has allowed an overbought condition to unwind. Price remains above a key support area at the 50-day EMA, at $3880.7. Clearance of this EMA would strengthen a short-term bear theme and signal scope for a deeper retracement. Initial resistance is at $4161.4, the Oct 22 high. A stronger recovery would refocus attention on $4381.5, the Oct 20 high and bull trigger.
- The latest pullback in WTI futures appears to be a flag formation - a bullish continuation pattern. This suggests that a bullish corrective cycle remains intact for now. Price has recently traded through the 50-day EMA, at $60.87, signalling scope for a stronger recovery. Note too that resistance at $62.34, the Oct 8 high, has been pierced. A clear move through it would expose key resistance at $65.77, Sep 26 high. The bear trigger is $55.96, the Oct 20 low.
US TSYS: Lower On Shutdown Hopes, Front-Loaded Supply Headlines Docket
Nov-10 11:53
- Treasuries have pared losses but still sit comfortably lower on the day in response to improved odds of the government shutdown ending after eight centrist Democrats on Sunday voted with Republicans on a new CR to fund the US government through Jan 30.
- Today’s docket focus should be on front-loaded supply ahead of Veterans Day tomorrow, with a 3Y auction along with heavy bill issuance.
- Cash yields are 2.4-3.3bp higher on the day, with increases slightly led by the belly possibly ahead of that 3Y supply.
- TYZ5 trades at 112-20 (-07+) off an earlier low of 112-15 on reasonable overnight volumes nearing 340k.
- Resistance is seen at Friday’s joint high of 113-02 (Nov 5 & 7 highs, a key level), but a bear threat is still present at 112-06 (Sep 25 low) before which lies 112-09+ (Nov 5 high) and other various support levels.
- Data: No releases of note.
- Fedspeak: Daly on Bloomberg TV (0830ET), Musalem on Bloomberg TV (0945ET)
- Coupon issuance: US $58B 3Y Note Auction - 91282CPK1 (1300ET). Last month’s 3Y auction stopped through by 0.8bp although saw both the bid to cover and indirect take receded.
- Bill issuance: US Tsy $86B 13W & $77B 26W bill auctions (1130ET) and $95B 6W bill (1300ET)
- Politics: Trump in bilateral meeting with President of Syria (1100ET), Trump participates in swearing-in ceremony for Ambassador to Republic of India (1500ET)
OUTLOOK: Price Signal Summary - USDJPY Trend Needle Points North
Nov-10 11:38
- In FX, EURUSD has recovered from its recent lows. The move higher, for now, appears corrective. A short-term recovery is allowing a recent oversold condition to unwind. Resistance to watch is the 20-day EMA, at 1.1587. It has been pierced, a clear break of it would signal scope for an extension towards the 50-day EMA, at 1.1627. The trend remains bearish. A reversal would refocus attention on the bear trigger at 1.1469, the Nov 5 low.
- A bear trend in GBPUSD remains intact and the latest recovery appears corrective. The move higher is allowing an oversold trend condition to unwind. Firm short-term resistance to watch is at the 20-day EMA, at 1.3237. A break of this hurdle would signal scope for an extension towards the 50-day EMA, at 1.3340. A resumption of the downtrend would pave the way for an extension towards 1.2971. The bear trigger is 1.3010, the Nov 4 and 5 low.
- The trend structure in USDJPY is unchanged, it remains bullish and the latest shallow pullback appears corrective. Moving average studies are in a bull-mode position, highlighting a dominant uptrend. The bull trigger is 154.48, the Nov 4 high. A break of this level would confirm a resumption of the uptrend and open 154.80, the Feb 12 high. First important support to watch lies at 152.46, the 20-day EMA.
