US DATA: NY Fed Services Stabilizing At Very Weak Level
May-16 15:58
The NY Fed's Business Leaders Survey pointed to services sector activity in the region stabilizing at a very weak level in May.
- The current General Activity index improved slightly to -16.2 (-19.8 prior which was a 27-month low), with the current business climate index (-51.7, up 9 points) and 6-month expectations for the business climate (up 4.1 points to -45.9) also improving.
- But all of the main indices remain in recessionary territory there they have been since March, and 6-month expectations for general activity actually fell further to -28.1 (down 1.5 points).
- Price dynamics were mixed: prices paid ticked up 00.9 points to 58.5, remaining around 2-year highs, though prices received receded 5.3 points to 20.7, lowest in 4 months.
- Per the report: "Employment held steady, and wage growth slowed. Supply availability worsened significantly. Input price increases remained moderate, while selling price increases slowed somewhat. Firms were again quite negative about the outlook, with nearly half expecting activity to decline in the months ahead."
- One major caveat is that survey responses were collected between May 2 and May 9 so will not have taken account of the subsequent US-China trade detente. Either way, it looks like there was a tentative stabilization in the survey in May.
- This survey has roughly corresponded with the level of the ISM Services index, suggestive of no further major deterioration in the latter in May (April saw a 0.8 point uptick to 51.6).
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US 10YR FUTURE TECHS: (M5) Retracement Mode
Apr-16 15:52
- RES 4: 113-04 76.4% retracement of the Apr 7 - 11 bear leg
- RES 3: 112-12 61.8% retracement of the Apr 7 - 11 bear leg
- RES 2: 111-25 50.0% retracement of the Apr 7 - 11 bear leg
- RES 1: 111-09+ High Apr 16
- PRICE: 111-04+ @ 16:50 BST Apr 16
- SUP 1: 110-15+/109-08 Low Apr 14 / 11 and the bear trigger
- SUP 2: 108-26+ 76.4% retracement of the Jan 13 - Apr 7 bull cycle
- SUP 3: 108-21 Low Feb 19
- SUP 4: 108-03+ Low Dec 12 ‘24 and a key support
Treasury futures traded higher this week. The climb has resulted in a breach of both the 20- and 50-day EMAs. For now, the latest bounce is considered corrective and the contract is retracing the steep sell-off between Apr 7 - 11. The next resistance to watch is 111-25, 50.0% of the Apr 7 - 11 bear leg. A resumption of weakness would refocus attention on 109-08, the Apr 11 low. A break of this level would resume the downtrend.
OPTIONS: Larger FX Option Pipeline
Apr-16 15:51
- USD/CAD: Apr22 C$1.4315($1.0bln), C$1.4400($1.2bln)
GBP: Fails to Benefit From Late FTSE Rally
Apr-16 15:46
- GBP/USD's early outperformance has reversed through the London close, with the pair back to flat having traded with gains of as much as ~65 pips at the NY crossover.
- The 15-minute candle chart shows the drift off highs today has put price through the uptrendline support drawn off the Apr09 low, which had helped dictate the early upside to 1.3292.
- Further slippage toward 1.3163 would mark the 23.6% retracement of the Trump U-turn rally - and would still leave the pair over 3% higher vs the pullback low.
- GBP rallied alongside equities and risk following the 90-day tariff reprieve headlines, however GBP has not seen support from the late rally in the FTSE-100 today, which added over 1% off the day's lows on a sharp 50 point rally in the last hour of trade.
- EUR/GBP strength off lows today partially snaps the sharp weakness seen off the April high - confirming the latest pullback in cross as corrective. A resumption of gains would open 0.8781, a Fibonacci projection point.
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