US EURODLR OPTIONS: Latest trades
- 0QU3 96.25c, bought for 35 in 5k.
- SFRM3 94.75/94.87/95.00c fly, sold at 4 in 2k.
- SFRM3 94.81/94.87cs, bought for 1.25 in 5k.
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US TSYS: Sentiment Sours, Projected Rate Cuts Moderate
- Treasury futures are holding near lows after the bell, curves flatter, extending inversion with the short end underperforming.
- There were no obvious headline or Block-driven trigger as projected rate cuts continue to climb off Thursday's lows given the rise in UofM's long term inflation expectations and cooling sentiment.
- Even Chicago Fed Goolsbee's comment on PBS over decelerating inflation failed to elicit much of a lasting reaction (though equities are rebounding at the moment: SPX Eminis -7.0 at 4137.0 vs. 4112.25 low).
- Yesterday saw three consecutive 25bp cuts projected to start in September.
- At the moment, however, September cumulative -20.9bp at 4.858%, November cumulative -44.1bp at 4.625%, Dec'23 cumulative -68.5bp at 4.381%, while Jan'24 cumulative is at -91.4bp (vs. 110.2bp Thu) at 4.153%. Fed Terminal currently at 5.08% in Jun'23 and Jul'23.
- White House Press Secretary Karine Jean-Pierre has told reporters that President Biden will meet with the four leaders of Congress "early next week" for a second round of talks on the debt limit, but declined to provide a specific date. Jean-Pierre: "When we have a date, certainly we will share that will all of you," adding that "productive talks" have been ongoing between negotiators representing all parties and will continue over the weekend.
USDCAD TECHS: Strong Bounce Sees Prices North of 50-Day EMA
- RES 4: 1.3695 High Mar 28
- RES 3: 1.3668 High Apr 28 and key resistance
- RES 2: 1.3640 High May 3
- RES 1: 1.3532 High May 12
- PRICE: 1.3532 @ 15:55 BST May 12
- SUP 1: 1.3363/15 Intraday low / Low May 8
- SUP 2: 1.3302 Low Apr 14 and a key near-term support
- SUP 3: 1.3275 Low Feb 14
- SUP 4: 1.3262 Low Feb 2
A strong rally in USDCAD extended Friday, tilting the pair to a new weekly high at 1.3532. This has eased recent bearish pressure. The pair has topped the 50-day EMA, at 1.3518. A clear break of this level would be seen as a short-term bullish development and signal scope for a climb towards resistance at 1.3668, the Apr 28 high. Key support lies at 1.3302, the Apr 14 low, where a break is required to reinstate a bearish theme.
AUDUSD TECHS: Corrective Pullback
- RES 4: 0.6921 High Feb 20
- RES 3: 0.6861 50.0% retracement of the Feb 2 - Mar 10 bear leg
- RES 2: 0.6824 High Feb 24
- RES 1: 0.6818 High May 10
- PRICE: 0.6651 @ 15:53 BST May 12
- SUP 1: 0.6651 Low May 12
- SUP 2: 0.6640/6565 Low May 4
- SUP 3: 0.6565 Low Mar 10 and the bear trigger
- SUP 4: 0.6547 61.8% of the Oct - Feb bull cycle
AUDUSD’s previous positive tone faded further Friday. This week’s test of key resistance at 0.6806, Apr 14 high, however, reinforces a bullish theme. A clear break of this level would strengthen the case for bulls and open 0.6861, a Fibonacci retracement. On the downside, a continuation lower would threaten the bullish theme and expose 0.6640, the May 4 low. Key support lies at 0.6565, the Mar 10 low.
