US TSYS: Modestly Bear Steeper, MNI Chicago PMI Headlines Docket
Oct-31 10:50
- Treasuries are a little lower overnight, mostly within yesterday’s range but with 30Y yields pushing to their highest since Oct 10 when US-China trade tensions first re-escalated (still not quite fully reversing the move despite this week’s Trump-Xi meeting).
- With no PCE or ECI releases due to the government shutdown, data focus is squarely on the MNI Chicago PMI. The Chicago CARTS retail sales indicator will also be updated.
- Cash yields are 0-1bp higher on the day, with increases led by the long end.
- The mild steepening bias goes against the underperformance at the very front end of the SOFR strip.
- TYZ5 trades at 112-20+ (-02) on subdued cumulative volumes of 235k, holding within yesterday’s range. Resistance is seen at 113-06 (20-day EMA) but a bear threat is present after a recent pullback, with support seen at 112-16 (yesterday’s low) before 112-14 (Oct 9 low) and 112-06 (Sep 25 low and reversal trigger).
- Data: Chicago CARTS (0830ET), MNI Chicago PMI (0945ET)
- Fedspeak: Logan opening remarks (0930ET), Hammack and Bostic fireside chat at bank funding conference (1200ET) – see STIR bullet
- Politics: Trump departs The White House for Florida (1000ET)
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Historical bullets
OUTLOOK: Price Signal Summary - WTI Futures Remain Below Resistance
Oct-01 10:47
- On the commodity front, the trend condition in Gold is unchanged and a bull cycle remains in play. The yellow metal has traded to a fresh cycle high this week, confirming a resumption of the primary uptrend. Note that moving average studies are in a bull-mode position, highlighting a dominant uptrend. Sights are on $3909.4, a 2.00 projection of the May 15 - Jun 16 - 30 price swing. On the downside, support to watch lies at $3646.3, the 20-day EMA. A pullback would be considered corrective.
- In the oil space, WTI futures have pulled back from their recent gains. The contract has recently breached $65.43, the Sep 2 high and this has potentially improved the S/T condition for bulls. However, the next key resistance is at $68.43, the Jul 30 high, where a break is required to signal scope for a stronger recovery. For bears, a clear reversal lower would refocus attention on key support at $60.85, the Aug 13 low. A break of this level would reinstate the downtrend.
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Oct-01 10:43
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OUTLOOK: Price Signal Summary - USDJPY Corrective Pullback Extends
Oct-01 10:37
- In FX, the trend theme in EURUSD remains bullish and the pullback between Sep 17 - 25, appears corrective. Support to watch lies at 1.1684. the 50-day EMA. It has been pierced, a clear break of this average would signal scope for a deeper retracement and expose 1.1574 initially, the Aug 27 low. For bulls, a clear resumption of gains would refocus attention on 1.1923, a 2.00 projection of Feb 28 - Mar 18-27 swing. Initial firm resistance to watch is 1.1820, the Sep 23 high.
- The bear cycle in GBPUSD that started Sep 17, remains in play and the latest bounce - for now - appears corrective. Recent weakness resulted in a break of a trendline drawn from the Aug 1 low. This undermines a recent bullish theme. Note too that 1.3333, the Sep 3 low and a key support, has been pierced, opening 1.3282 next, the Aug 6 low. Initial key resistance to watch is 1.3537, the Sep 23 high. A break of it would signal a reversal.
- USDJPY continues to weaken as the retracement from last week’s high print extends. The move down - for now - appears corrective. However, support at 147.60, the 50-day EMA, has been pierced. A clear break of it would expose pivot support at 145.49, the Sep 17 low. Moving average studies are in a bull-mode position, highlighting a dominant uptrend. A resumption of gains would signal scope for a climb towards key resistance at 150.92, Aug 1 high.
