EMERGING MARKETS: Local Analysts Believe Copper Demand To Remain Unchanged Over 2024
May-24 10:40
- China’s copper demand will remain roughly unchanged over 2024 at single digit percentage growth over 2023 levels despite recent property-sector support and a historic global price rally, while reports of official domestic smelter output cuts are yet to materialise, local analysts have told MNI.
- US Treasury secretary Janet Yellen has said “substantial increases” in living costs are a “problem to a lot of people” as persistent inflation dents President Joe Biden’s standing with voters ahead of November’s election.
- The Bank of Japan will decide to start tapering the size of its bond-buying by end-July, according to nearly two-thirds of economists polled by Reuters, while close to 90% forecast an interest rate hike to at least 0.20% by the end of the year.
- China's military carried out a second day of war games around Taiwan on Friday, with drills to test its ability to "seize power" and control key areas in exercises Beijing has said were launched to punish Taiwan's new president, Lai Ching-te.
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US TSYS: Lagging Broader Sell-Offs, Durable Goods and 5Y Supply Ahead
Apr-24 10:40
- Treasuries see broad downward pressure but lag a larger sell-off in European and in particular Australian FI earlier today after beats for Australian CPI and the German Ifo index.
- Cash yields sit 2.6-3.3bps higher although the introduction of the new 2 after yesterday’s auction sees 2s10s at -30.5bps for a 2.5bp increase from yesterday’s close.
- TYM4 is close to session lows of 107-25 (- 09+), on typical cumulative volumes approaching 300k, but remains above yesterday’s pre-PMI low of 107-20+. The bearish trend condition remains in place with support seen at 107-13+ (Apr 16 low) after which lies 107-07+ in the first of some Fibo projection levels.
- Earnings season continues whilst today’s docket focus is on durable goods orders in the final update before tomorrow’s Q1 GDP advance, before 5Y supply.
- Data: MBA mortgage data Apr 19 (0700ET), Durable goods Apr prelim (0830ET)
- Note/bond issuance: US Tsy $30B 2Y FRN (1130ET), US Tsy $70B 5Y Note auction, 91282CKP5 (1300ET)
- Bill issuance: US Tsy $60B 17W Bill auctions (1130ET)
OUTLOOK: Price Signal Summary - USDJPY Path Of Least Resistance Remains Up
Apr-24 10:35
- In FX, EURUSD has recovered from its recent lows but gains have stopped short of troubling resistance. The move higher appears to be a correction. The recent break on Apr 12 of key support at 1.0695, Feb 14 low and bear trigger, confirmed a resumption of the downtrend. This signals scope for 1.0568 next, the Nov 2 2023 low, and 1.0540, the base of a bear channel drawn from the Dec 28 high. Initial firm resistance is 1.0729, the 20-day EMA.
- The trend condition in GBPUSD remains bearish and short-term gains are considered corrective. A recovery is allowing an oversold trend condition to unwind. Moving average studies are in a bear-mode set-up and the recent break lower, maintains the downward price sequence of lower lows and lower highs. Sights are on 1.2266, the Nov 14 2023 low. Initial firm resistance is seen at 1.2517, the 20-day EMA.
- The USDJPY trend condition remains bullish and the pair has traded higher today. Moving average studies remain in a bull mode position too and this set-up continues to highlight a clear rising trend. Note that the trend is overbought, however, this is clearly not a concern for bulls at this stage. Sights are on the 155.00 handle next and 155.29, the 1.764 projection of the Feb 1 - 13 - Mar 8 price swing. On the downside, support lies at 153.13, the 20-day EMA.
BUNDS: Eyeing next Yield level
Apr-24 10:33
- Bund is now testing Monday's low of 130.52, but initial support is seen towards 130.45, the 2.56% Yield retracement level.
- A break through that area, will open to 2.60%, which today equates to 130.04 today.
BTP futures is still leading lower so far today, helping keep the Italian, German 10yr spread wider.
Looking at Yield for the BTP 10yr, today reference 117.05:
- 3.948% = 116.78 (last week high Yield).
- 3.973% = 116.57 (April high).
- 4.000% = 116.34 (2024 high).
