FED: NatWest, Nomura, BMO, Rabo, Swedbank Tweak Fed Views (2/3)
The following analysts revised their Fed calls after the September meeting: * NatWest: Pulling forw...
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US 10YR FUTURE TECHS: (U5) Monitoring Support
- RES 4: 113-23 76.4% retracement of the Sep’24 - Jan’25 sell-off
- RES 3: 113-07 76.4% retracement of the Apr 7 - 11 sell-off
- RES 2: 112-23 High May 1
- RES 1: 112-15+ High Aug 5
- PRICE: 111-23 @ 16:51 BST Aug 19
- SUP 1: 111-10+ 50-day EMA
- SUP 2: 110-23+/08+ Low Aug 1 / Low Jul 15 & 16
- SUP 3: 110-03 76.4% retracement of the May 22 - Jul 1 bull leg
- SUP 4: 109-28 Low Jun 6 and 11
The underlying bullish theme in Treasury futures remains intact, supported by the recent clearance of 112-12+, the Jul 1 high. Short-term weakness is considered corrective. A resumption of gains would open 112-23, the May 1 high and the next important resistance. Above 112-23, retracement levels are layered between 113-07 and 113-23. Key support is 110-08+, the low on Jul 15 and 16. First key support is yet to be tested at 110-23+, the Aug 1 low.
US DATA: Redbook Retail Sales Remain Solid Through Mid-August
Retail sales as measured by the Johnson Redbook index rose 5.9% Y/Y in the week ending August 16, up from 5.7% the prior week and bringing the month-to-date rise to 5.8%.
- That's very solid outright, albeit somewhat below retailers' targeted 6.2% gain. Per the report's anecdotes: "Early back-to-school sales results have generally fallen short of expectations. Some markets, particularly in the Midwest and Southeast, have already begun their back-to-school season, while others have not yet started. Additionally, the tail-end of state tax-free holidays in Florida, Maryland, Massachusetts, Ohio, and Texas has contributed to increased traffic and sales. Due to regional differences in school calendars and variations in merchandising schedules, the rollout of new seasonal programs has varied from store to store; it is still too early to gauge consumer reactions to these programs. Many major retailers are set to report their second-quarter earnings this week and next week, which may provide insights into how tariffs are affecting value-conscious consumers and consumer spending overall."
- On a Y/Y basis, Census Bureau retail sales came in at 3.9% overall in July, down from 4.4% prior, though control group sales picked up to 4.8% from 4.5%. While the Johnson Redbook has tended to "over-estimate" Census Bureau sales on this basis, sustained growth continues to suggest solid consumption dynamics through the middle of Q3 (with the usual caveat that these are in nominal and not price-adjusted terms).
OPTIONS: Larger FX Option Pipeline
- EUR/USD: Aug21 $1.1600(E1.3bln), $1.1700(E1.6bln), $1.1750(E2.0bln), $1.1800(E3.0bln); Aug25 $1.1640-55(E2.0bln)
- USD/JPY: Aug21 Y145.95-00($1.2bln), Y146.70-80($1.8bln); Aug22 Y147.90($1.4bln)
- AUD/USD: Aug21 $0.6590-00(A$1.8bln); Aug25 $0.6510-25(A$1.1bln)
