MACRO ANALYSIS: MNI US Macro Weekly: War Shock Meets Weak Jobs Data
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ASIA: Coming Up In Asia Pac Markets On Thursday
| 2330BST | 0730HKT | 1030AEDT | Fed's Cook on Monetary Policy & Economy |
| 2350BST | 0750HKT | 1050AEDT | Japan Weekly Offshore Investment Flows |
| 0030BST | 0830HKT | 1130AEDT | Australia Dec Trade Balance |
| 0135BST | 0935HKT | 1235AEDT | New Zealand 2030, 2034, 2054 Bond Sale |
| 0335BST | 1135HKT | 1435AEDT | Japan 30yr Debt Sale |
Source: Bloomberg Finance L.P./MNI
US TSYS/SUPPLY: Near-Term Bill Outlook Steady Before Usual Tax Season Drop (2/2)
While it continues to eye nominal coupon auction size increase at some point in upcoming quarters, and made its clearest signal yet that it would be looking increasingly toward bills to meeting financing requirements, Treasury's near-term outlook for bill sales looks to be largely as anticipated.
- As expected Treasury has no plans to upsize current bill auction sizes and as usual will start to pull them back going into the April tax receipt season.
- Per the Refunding policy document, "Treasury expects to maintain the offering sizes of benchmark bills at or near current levels into mid-March. By late March, Treasury anticipates incrementally reducing short-dated bill auction sizes in light of the April 15 tax date. These reductions will likely lead to a cumulative $250-300 billion net decline in total bill supply by early May."
- TBAC estimates that the net implied change in bills is basically flat through the first half of the calendar year, with $260B increase in supply through March followed by a drop of $242B in the Apr-Jun quarter (assuming a total of $103B in buybacks, based on previous quarters' results). This is calculated as: net marketable borrowing minus net coupon issuance plus buybacks as seen in the table. Note that buybacks
- Below is the TBAC presentation to the Treasury's estimates for bill financing as well as cumulative net issuance by Treasury coupon segment.
USDCAD TECHS: Unwinding A Recent Oversold Condition
- RES 4: 1.3929 High Jan 16 and a reversal trigger
- RES 3: 1.3879 High Jan 20
- RES 2: 1.3788 50-day EMA
- RES 1: 1.3715 20-day EMA
- PRICE: 1.3631 @ 17:01 GMT Feb 4
- SUP 1: 1.3482 Low Jan 30 and the bear trigger
- SUP 2: 1.3473 Low Oct 2 ‘24
- SUP 3: 1.3400 50.0% retracement of the 2021 - 2025 uptrend
- SUP 4: 1.3359 Low Jan 31 2024
The strong recovery from last Friday’s low in USDCAD continues to highlight a corrective cycle. Note that the trend has been in oversold territory and the bounce is allowing this condition to unwind. The next important resistance to watch is 1.3715, the 20-day EMA. Resistance at the 50-day EMA, is at 1.3788. Key support and the bear trigger has been defined at 1.3482, the Jan 30 low. A break of this level would confirm a resumption of the downtrend.
