US IG FINANCIALS: MNI US IG BDCs/Alt Mgrs: Week in Review

Oct-02 19:04

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MNI US IG BDCs/Alt Mgrs: Week in Review The average spread of BDCs/Alt Mgrs in our coverage univers...

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FOREX: NZD and CAD Diverge Following CB Decisions, JPY Rises

Sep-02 19:03
  • While the RBNZ delivered an expected 25bp hike to 2.75%, a very cautious stance on both the extent and timing of further tightening has significantly weighed on the New Zealand dollar.
  • Despite a moderate bounce for NZDUSD, spot remains 0.83% lower as we approach the APAC crossover and looks likely to close comfortably below the bull channel which represents an important short-term technical breakout point around the 0.59 handle. AUDNZD remains 1.15% in the green and remains within touching distance of 1.2288 cycle highs.
  • Separately, while the Bank of Canada held the 2.25% policy rate Wednesday, Governor Macklem’s acknowledgement of upside inflation risks increasing and a downplaying of growth risks have provided a solid boost to the Canadian dollar.
  • USDCAD had been rising in early trade Wednesday, but after respecting 50-day EMA resistance, the hawkish BOC impetus leaves the pair around 100 pips off the days highs around 1.3840 approaching the close. This leans in to the narrative that recent USDCAD strength was technically corrective, with downside focus remaining on 1.3732, the Aug 21 low.
  • Elsewhere, USDJPY had a volatile session which translated to an impressive 217 pip range. The initial impulse which dragged USDJPY back below 160 was a hawkish sounding BOJ Takata who said the bank needs to raise interest rates flexibly to address upside risks to prices, arguing it should not be constrained by estimates of the neutral rate or market expectations for the pace of tightening.
  • Session lows of 158.22 were just shy of the next support at 158.03, the Aug 20 low. Having bounced back towards 159 in late trade, clearance of said support would be needed to strengthen a bearish threat.
  • During APAC on Thursday, we have a plethora of central bank speakers including RBNZ Gov Breman and RBA Assistant Governors Jones and Hunter. Swiss CPI and GDP highlight the European calendar before US ISM Services.

EURJPY TECHS: Potential Reversal

Sep-02 19:00
  • RES 4: 187.95 High Apr 17 and a key M/T bull trigger 
  • RES 3: 187.47 High Jul 29 and a key resistance  
  • RES 2: 186.65 0.764 proj of the Aug 3 - 1- 12 price swing
  • RES 1: 186.02 High Aug 21 and short-term bull trigger 
  • PRICE: 184.07 @ 16:50 BST Sep 02
  • SUP 1: 183.66/183.16 Low Sep 02 / Low Aug 12 
  • SUP 2: 181.33 Low Aug 7 
  • SUP 3: 179.37 Low Aug 3 and key support
  • SUP 4: 178.82 High Oct 30 2025

A sharp pullback in EURJPY Wednesday resulted in a breach of initial support around the 50-day EMA, at 184.88. This highlights a potential early reversal signal and if correct the end of the recent corrective phase that started on Aug 3. A continuation lower would signal scope for a move towards 183.16, the Aug 12 low. For bulls, initial resistance to watch is 186.02, the Aug 21 high. Clearance of this hurdle would reinstate the recent bull leg.    

COMMODITIES: Crude Rises After US/Iran Strikes, Precious Metals Rebound

Sep-02 18:42
  • Crude oil has edged higher on Wednesday after the US and Iran escalated direct confrontations overnight, with shipping risks in the Strait of Hormuz back in focus.
  • WTI Oct 26 is up by 0.5% at $90.7/bbl.
  • The US military's Central Command said it struck IRGC air defences, radar systems, maritime assets, mine-laying capabilities and communications sites on Tuesday, with Iranian media reporting hits on multiple targets near the Strait of Hormuz.
  • Despite this, there is a view that both the US and Iran are not seeking an uncontrolled escalation in the current bout of tensions.
  • For WTI futures, this week’s extension higher reinforces bullish conditions. Today’s early gains saw key resistance at $91.27, the May 18 high, pierced. A clear break of this hurdle would confirm a resumption of the medium-term uptrend and expose $94.04, a Fibonacci projection point.
  • Meanwhile, precious metals have rebounded today, as the US dollar pulled back from earlier highs amid a stabilisation in risk sentiment.
  • Spot gold is up by 1.1% at $4,375/oz, while silver has risen by 1.6% to $65.1/oz.
  • For gold, the previous move lower earlier this week resulted in a breach of 50-day EMA support at $4,336.3. A clear break of this would signal potential for an extension towards $4,231.1, a Fibonacci retracement. On the upside, initial resistance to watch is $4,472.1, the Aug 31 high.