SWEDEN: Only Slight Downward Surprise To July CPIF ex-energy
On an unrounded basis, CPIF ex-energy was 3.15% Y/Y in July, so only just rounding down to 3.1% Y/Y. A reminder that the Riksbank projected July CPIF ex-energy at 2.84% Y/Y in the June MPR, but this is a stale forecast after June surprised 4 tenths to the upside.
Very contained reaction in SEK FX at typing, with the data not presenting enough of a downward surprise to meaningfully shift consensus for the Riksbank’s policy path.
As always, no details are provided in the flash release. The final data is due next Thursday.
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USDJPY TECHS: Corrective Bounce Extends
- RES 4: 148.65 High May 12 and a reversal trigger
- RES 3: 148.03 High Jun 23
- RES 2: 146.77 76.4% retracement of the Jun 23 - Jul 1 bear leg
- RES 1: 146.45 Intraday high
- PRICE: 146.14 @ 07:03 BST Jul 8
- SUP 1: 144.23/142.68 Low Jul 7 / 1
- SUP 2: 142.12 Low May 27 and a key short-term support
- SUP 3: 141.96 76.4% retracement of the Apr 22 - May 12 upleg
- SUP 4: 141.49 Low Apr 23
USDJPY traded higher Monday. The recovery has resulted in a breach of the 50-day EMA, at 144.95, and the daily close above the EMA highlights a stronger reversal. 146.19, the Jun 24 high, has been pierced. An extension would open 146.77 next, a Fibonacci retracement. Note that moving average studies are in a bear-mode position, signalling a dominant medium-term downtrend. First support to watch lies at 144.23, the Jun 7 low.
RBA: Bullock - More Easing Likely To Come, Waiting On Q2 CPI Data
RBA Governor Bullock's press conference is stressing that the direction of policy rates is still skewed lower. Today's decision reflected a need to wait for more data to cut rates further, particularly on inflation. The Governor stated that if Q2 inflation (which prints at the end of this month) comes in as the central bank forecast, it can ease further. This sets up for an August cut, although Bullock wouldn't be drawn on whether we could see a 50bps cut at that meeting.
- Bullock stated the board members who voted to hold rates steady today weren't convinced by the recent monthly inflation figures, and want to see the fuller inflation picture from the Q2 data. This, Bullock stressed, meant that today's decision on rates was more about timing rather than direction.
- Bullock also noted at the next policy meeting the central bank will have more information on the global trade backdrop.
EUROSTOXX50 TECHS: (U5) Recovery Remains Intact
- RES 4: 5486.00 High May 20 and a key bull trigger
- RES 3: 5456.00 High Jun 11
- RES 2: 5403.00 High Jun 12
- RES 1: 5366.00 High Jun 30
- PRICE: 5351.00 @ 06:39 BST Jul 8
- SUP 1: 5194.00 Low Jun 23 and a bear trigger
- SUP 2: 5182.00 Low May 2
- SUP 3: 5100.94 38.2% retracement of the Apr 7 - May 20 bull leg
- SUP 4: 5078.00 Low Apr 30
Short-term trend signals in Eurostoxx 50 futures remain bearish, however, the recovery from the Jun 23 low still appears to be a potential reversal and the contract is holding on to its most recent gains. Price has pierced both the 20- and 50-day EMAs. A clear break of both averages would strengthen a reversal theme. This would open 5486.00, May 20 high and bull trigger. On the downside, a break of 5194.00, Jun 23 low, reinstates a bearish theme.
