EM ASIA CREDIT: Philippines: Surprise rate cut

• RES 4: 6610.98 2.0% 10-dma envelope
• RES 3: 6600.00 Round number resistance
• RES 2: 6543.75 2.00 proj of the Apr 7 - 10 - 21 price swing  
• RES 1: 6541.75 High Sep 5  
• PRICE: 6516.25 @ 07:24 BST Sep 9
• SUP 1: 6456.35/6371.75 20-day EMA / Low Sep 2 
• SUP 2: 6359.10 50-day EMA 
• SUP 3: 6313.25 Low Aug 6 
• SUP 4: 6239.50 Low Aug 1 and a key support

A bull cycle in S&P E-Minis remains intact and the latest pullback has once again proved to be a shallow correction. The contract traded to a fresh cycle high last week, breaching the Aug 28 high of 6523.00. This confirms a resumption of the uptrend and maintains the price sequence of higher highs and higher lows. Sights are on 6543.75 next, a Fibonacci projection. Initial support to watch is 6456.35, the 20-day EMA.

• RES 4: $77.85 - 2.794 proj of the Apr 9 - 23 - May 5 price swing
• RES 3: $75.65 - 2.500 proj of the Apr 9 - 23 - May 5 price swing
• RES 2: $74.25 - High Jun 23 and a bull trigger 
• RES 1: $66.03/69.36 - High Sep2 / High Jul 30 and key resistance   
• PRICE: $62.73 @ 07:21 BST Sep 9
• SUP 1: $61.29 - Low Aug 13 and the bear trigger 
• SUP 2: $57.71 - Low May 30
• SUP 3: $54.80 - Low May 5
• SUP 4: $54.03 - Low Apr 9 and a key support

The trend condition in WTI futures is unchanged - a bear cycle remains intact. The pullback from last Tuesday’s high highlights a possible reversal and the end of the corrective phase. Initial resistance to watch is $66.03, the Sep 2 high. Key short-term resistance has been defined at $69.36, the Jul 30 high. A stronger resumption of weakness would pave the way for a move towards $57.71, the May 30 low.

This morning's USD weakness is helping prop the major pairs through to new September highs headed into this week's economic and inflation data (today benchmark payrolls revisions, Wednesday PPI, Thursday CPI).

• It's notable that today's USD weakness has not been triggered by a renewed pull lower in US yields (US 10y yield closed lower by over 5bps yesterday, but has steadied so far this morning). Instead, USDJPY selling looks the primary driver. JPY futures volumes sit just ahead of average, with activity picking up through late Asia/early Europe trade.
• Beyond G10, the USD weakness is most keenly being felt in APAC: the Thai Baht has rallied further despite the BoT stressing their concern with FX moves already this week (USD/THB broke to 31.610 overnight, lowest since 2021), the USD/MYR is again testing clustered support into 4.18-4.19 while USD/TWD is lower for a fourth consecutive session and hitting September lows.
• Growing odds for a Fed 50bps cut in September are partially responsible here, and today's payrolls benchmark revision is widely expected to imply large downward revisions to payrolls growth through the 12 months to March - which should add to the White House's call for a faster pace of easing. This raises the importance of nearby USD Index support at 97.109, and into the bear trigger of 96.377.