US 10YR FUTURE TECHS: (M6) Bear Cycle Remains In Play

• It’s been a slow and steady ascent for the US dollar during Wednesday’s US session, assisted by the generally favourable US data. The Ice USD index is currently up 0.35% as we approach the FOMC minutes, remaining just shy of yesterday’s highs.
• Declines in the G10 have been led by the New Zealand dollar following the RBNZ’s dovish hold overnight, with the latest leg of greenback strength forcing new session lows for NZDUSD at 0.5977.
• Elsewhere, the Japanese yen is the second worst performer, as stalling momentum for the yen rally has prompted a steady reversal. USDJPY stands 0.75% higher in sympathy, narrowing the gap significantly to the post-NFP highs which reside at 154.65.
• JPY moves have brushed aside latest comments from PM Takaichi - wherein she reiterated her vigilance in monitoring daily market moves, but perhaps most interestingly detailed that any tax cuts could operate with a refundable tax credit system - cementing the view that her cabinet are working towards alleviating cost pressures in the domestic economy.
• The yen weakness has been assisted by a false break lower for EURJPY yesterday, which after attempting to break the channel base below 181.30, has firmly bounced and keeps the key support intact for now. The longer EURJPY holds above horizontal resistance layered between 182.18-53 may be key for short-term cross/JPY sentiment.
• A less volatile session for the likes of EURUSD and GBPUSD keeps us within yesterday’s range, although EURUSD is pressing back towards 1.18 ahead of the APAC crossover. We had flagged a doji candle on the daily chart as a potential reversal signal, however, should we close below the Feb 6 low at 1.1766, this would be a meaningful bearish development for the pair.
• Australian employment data highlights Thursday’s calendar, before US jobless claims and Philly fed data. Focus will swiftly turn to Friday’s docket, where European PMIs and US GDP & PCE headline.

• US Data/Speaker Calendar (prior, estimate). All times ET
• 02/19 0820 Atlanta Fed Bostic opening remarks banking outlook conf
• 02/19 0830 Fed VC Bowman open remarks banking conf
• 02/19 0830 Initial Jobless Claims (227k, 225k), Continuing Claims (1.862M, 1.860M)
• 02/19 0830 Imports MoM (5%, 0.1%), Exports MoM (-3.6%, 0.1%)
• 02/19 0830 Trade Balance (-$56.8B, -$55.5B)
• 02/19 0830 Advance Goods Trade Balance (-$84.7B rev, -$86.0B)
• 02/19 0830 Wholesale Inventories MoM (0.2%, 0.2%), Retail MoM (0.2% est)
• 02/19 0830 Philadelphia Fed Business Outlook (12.6, 7.8)
• 02/19 0900 MN Fed Kashkari fireside chat economic outlook
• 02/19 1000 Pending Home Sales MoM (-9.3%, 2.0%), YoY (-1.3%, 3.0%)
• 02/19 1030 Chicago Fed Goolsbee opening remarks financial crisis conf
• 02/18 1130 US Tsy $105B 4W & $95B 8W bill auctions
• 02/18 1300 US Tsy $9B 30Y TIPS auction (912810US5)
• 02/19 1430 Chicago Fed Goolsbee moderated discussion
• Source: Bloomberg Finance L.P. / MNI

Some sell-side outlooks for the January minutes release: 

• BMO FICC: “the meeting notes stand to offer a more refined sense of the balance of opinions on the Committee. Recall that the most notable change in the policy statement was the removal of the language: "downside risks to employment rose in recent months." Moreover, at the press conference, Powell said, "many of my colleagues think, it's hard to look at the incoming data and say that policy's significantly restrictive at this time." It's with this context that we expect the Minutes to reinforce the sense that the Fed has little urgency to deliver further rate cuts.”
• Citi: “minutes are likely to reflect a number of Fed officials reading the labor market as more stable based on the data that was available ahead of the meeting. Some more hawkish Fed officials likely expressed that in their base case policy rates could remain on hold for some time. But we expect the majority of officials still viewed further cuts as appropriate at some point this year even though they are comfortable with keeping policy rates unchanged in the near term.”
• Deutsche: “We will continue to look for indications about how divided the Committee is on the policy path in 2026.”
• ING: “could be more interesting since the Fed displayed a more hawkish tinge. The minutes could reveal to what extent this was more aimed at stemming the dollar weakness at that point in time."
• MUFG: "The statement referred to “some signs of stabilization” in the unemployment rate so we should see signs of some optimism that suggests the FOMC is content for now with maintaining a level of moderate restrictiveness. We don’t expect any surprises and see limited market impact."
• Scotia: "likely to reiterate that policymakers feel rates are in a “good spot” now, allowing them time to assess economic developments."
• TD: "could help gain some clarity on the division of the committee's thinking, though recent inflation and jobs data have likely made the minutes stale"