EM LATAM CREDIT: Pemex: Fitch Watch Positive - Positive

SF Fed President Daly (non-2025/2026 FOMC voter) says in prepared remarks that "we will likely need to adjust policy in the coming months. Recalibrating it to match the collective risks to both of our mandated goals." Recall earlier this week she said in a Reuters interview that the Fed may need to cut more than twice by the end of the year.

• She notes that risks to the dual mandate goals of inflation and employment are "roughly balanced" but she's increasingly concerned about labor market weakness. "The labor market has softened. And I would see additional slowing as unwelcome, especially since we know that once the labor market stumbles, it tends to fall quickly and hard."
• "Inflation, absent tariffs, has been gradually trending down, and with a slowing economy and ongoing restrictive monetary policy, should continue to do so... Tariffs will boost inflation in the near term, but likely not in a persistent way that monetary policy would need to offset."
• She characterizes policy adjustments as "Recalibrating it to match the collective risks to both of our mandated goals", suggesting she doesn't see aggressive cuts.

The NY Fed's Global Supply Chain Pressure Index (GSCPI) continued to show relatively tame supply chain tightness in July, falling to 0.07 from 0.14 in June (rev from 0.00).

• The index is in standard deviations from the historical average and as such the current level is extremely "normal", in contrast with the pandemic peak when it exceeded 4 deviations from the average.
• At that time, supply chain issues applied upward supply-side pressure on goods price inflation.
• This time, it doesn't appear to be a major concern, with plenty of tariff-related reasons to be concerned core goods prices picking up further going forward.

• RES 4: 1.4111 Apr 10  
• RES 3: 1.4019 38.2% retracement of the Feb 3 - Jun 16 bear leg 
• RES 2: 1.3920 High May 21
• RES 1: 1.3879 High Aug 1
• PRICE: 1.3744 @ 16:14 BST Aug 6
• SUP 1: 1.3732/3557 20-day EMA / Low Jul 03
• SUP 2: 1.3540 Low Jun 16 and the bear trigger
• SUP 3: 1.3503 1.618 proj of the Feb 3 - 14 - Mar 4 price swing
• SUP 4: 1.3473 Low Oct 2 2024

USDCAD remains subdued, extending losses on the back of last Friday’s USD weakness. Initial firm support remains at 1.3732, the 20-day EMA, a break below which would resume the correction off the early August high at 1.3879. On the recent run higher, price traded through the 50-day EMA at 1.3743, which aided the rally. This week’s price action, however, has cancelled that bullish threat and returned focus lower. The 100-dma becomes a key pivot point: at 1.3841 last.