LATIN AMERICA: LATAM Credit Market Wrap

• RES 4: 1.4296 High Apr 7
• RES 3: 1.4200 Round number resistance 
• RES 2: 1.4111 High Apr 4
• RES 1: 1.4016/17 High May 12 / 13 / 50-day EMA
• PRICE: 1.3827 @ 16:28 BST May 21
• SUP 1: 1.3814/3751 Low May 8 / 6 and the bear trigger  
• SUP 2: 1.3744 76.4% retracement of Sep 25 ‘24 - Feb 3 bull run
• SUP 3: 1.3696 Low Oct 10 ‘24
• SUP 4: 1.3643 Low Oct 9 ‘24 

The trend condition in USDCAD remains bearish and recent gains appear corrective. Moving average studies are in a bear-mode position, highlighting a dominant downtrend. A resumption of the trend would open 1.3744, a Fibonacci retracement. Key resistance to watch is 1.4017, the 50-day EMA. A clear break of this hurdle would signal a stronger reversal and open 1.4111, the Apr 4 high.  

• Treasuries look to finish near late Wednesday session lows, curves bear steepening: 2s10s +6.792 at 58.019 - highest level since May 1. Heavier volumes tied to Jun/Sep Tsy futures rolls, 5s well over 1M.
• No economic data, headline or outright flow to site for the move other than trepidation over Pres Trump's tax & spending bill estimated to increase the deficit appr $3.3 trillion over 10 years. Lawmakers continued to debate the bill and passage remained uncertain despite Pre Trump personally haranguing GOP holdouts.
• Treasury futures extend session lows after the $16B 20Y Bond auction (912810UL0) tailed, drawing a high yield of 5.047% vs 5.035% When-Issued yield at the cutoff; 2.46x bid-to-cover vs. 2.63x prior. Bonds yield climbed to 5.0955% intraday high - last seen late October 2023. 10Y yield up to 4.5825% (+.0956).
• The Jun'25 10Y futures contract slipped to 109-13.5 low (-25) briefly -- through initial technical support at 109-18.5 (May 15 low) before bouncing to 109-19 - strengthening a bearish theme and exposing key support at 109-08, Apr 24 low and a bear trigger.
• Cross asset update: Gold up 33.4 at 3323.42, stocks weaker with rise in bond yield (SPX emini -95.0 to 5864.75), Crude retreating (WTI -0.62 at 61.41).
• Look ahead to Thursday's data: Weekly Claims at 0830ET, Flash PMIs at 0945ET, Exist Home Sales at 1000ET and KC Fed Mfg Activity at 1100ET.

• US Data/Speaker Calendar (prior, estimate)
• 22-May 0800 Richmond Fed Barkin fireside chat (no text, Q&A)
• 22-May 0830 Initial Jobless Claims (229k, 230k)
• 22-May 0830 Continuing Claims (1.881M, 1.883M)
• 22-May 0830 Chicago Fed Nat Activity Index (-.03, -0.25)
• 22-May 0945 S&P Global US Manufacturing PMI (50.2, 49.9)
• 22-May 0945 S&P Global US Services PMI (50.8, 51.0)
• 22-May 0945 S&P Global US Composite PMI (50.6, 50.3)
• 22-May 1000 Existing Home Sales (4.02M, 4.10M), MoM (-5.9%, 2.0%)
• 22-May 1100 Kansas City Fed Manf. Activity (-4, -5)
• 22-May 1130 US Tsy $85B 4W & $75B 8W bill auctions
• 22-May 1300 US Tsy $18B 10Y TIPS auction
• 22-May 1400 NY Fed Williams keynote remarks NY Fed event (text, Q&A)