EM LATAM SOV: MNI LATAM Sovereign Market Wrap

• Treasuries are extending lows after the bell -- well off the post-FOMC highs after the Fed held rates steady, 3 dissented in favor of a 25bp hike: Lorie Logan, Neel Kashkari, and Beth Hammack
• Focus back on geo-pol tensions in the Middle East: risk sentiment souring after the US & Iran traded strikes overnight (Iran hitting Jordan again overnight, US responded this morning, while Iraq's Hezbollah threatened Saudi Arabia and US forces). “We’ll be hitting them hard. They’re going to get a beating” Trump said on Fox this morning.
• West Texas Crude +5.45 at 84.71.
• Federal Reserve Chairman Kevin Warsh said Wednesday the central bank is committed to its 2% inflation target despite consumer price growth that has been above that goal for over five years. "There is no soft inflation target.
• TYU6 currently -16 at 108-10 (108-09 low), yield +.0873 at 4.6936%, curves twisting sharply steeper with the short end outperforming: 2s10s +11.617 at 43.326.
• Projected rate hike pricing through October consolidated, December still pricing in a 25bp hike. Current vs. late Tuesday (*): Sep'26 at +14.4bp (+24.1bp), Oct'26 at 21bp (31.4bp), Dec'26 32.1bp (+40.5bp).
• Post-Fed dollar pessimism will be tested by US GDP and PCE data on Thursday, while global markets will also await the BOE decision. German and Spanish CPI prints also kick off the latest round of Eurozone inflation readings.

• Stocks rebounded briefly after the FOMC left rates steady Wednesday, forgetting for the moment the simmering tensions in the Middle East that cooled sentiment earlier in the session. Pre Trumps reiterating the US will hit Iran hard following their missile attacks on US assets in Jordan overnight. West Texas crude trades appr $84.95/bbl.
• Currently, the DJIA -2.15%, SPX emini -1.23%, Nasdaq -1.69%.
• Industrials/Materials and IT sector shares continued to lead declines: Lennox Int -21.3% after missing earnings estimates, Vertiv -17.32%, Masco -10.71%. High CAPEX for AI-related buildouts continued to weigh on IT shares (note S. Korea's tech heavy KOSPI index has fallen 16% over the last couple sessions): KLA -9.75%, Super Micro Computer and Micron Tech -9.25%, Coherent -8.85%.

• RES 4: 1.4292 61.8% Retracement Feb’25 - Jan’26 downleg
• RES 3: 1.4264 1.618 proj of the Mar 9 - 31 - May 1 price swing
• RES 2: 1.4248 High Jun 24, 25 and 30 and the bull trigger  
• RES 1: 1.4190 High Jul 9  
• PRICE: 1.4040 @ 20:46 BST Jul 29
• SUP 1: 1.4032/4003 50-day EMA / Low Jul 20
• SUP 2: 1.3981 38.2% retracement of the May 1 - Jun 24 bull cycle  
• SUP 3: 1.3951 Low Jun 15
• SUP 4: 1.3899 50.0% retracement of the May 1 - Jun 24 bull cycle 

The USDCAD trend structure remains bullish and the bear cycle since Jun 24 is considered corrective. Attention is on the next important support at 1.4035, the 50-day EMA. The average has been pierced, however, it remains intact - for now. A clear break of the EMA would signal scope for a deeper corrective retracement and open 1.3981, a Fibonacci retracement. The bull trigger is at 1.4248, the Jun 24, 25 and 30 high.