US DATA: Philly Service Providers Unable To Pass Large Cost Increases On
The Philly Fed non-manufacturing index was weak across the board although that included more pronounced signs of limited pricing power. Responses were collected from Apr 7-17 which should give a good assessment of latest US trade policy gyrations.
- The Philly Fed non-mfg activity index, which specifically asks respondents their assessment of business activity for the region rather than their own firm, fell further in April to -42.7 from -32.5 in Mar, -13.1 in Feb and -9.1 in Jan.
- It was last lower in Apr and May 2020 and otherwise would be a low for a series that started in 2011.
- The firm-specific activity index meanwhile sounds less pessimistic at -26.7 after -17.5, but it tells the same relative story at it third lowest on in the series history.
- There’s a similar story in six-month ahead expectations as well, with both regional and firm-level activity at levels only seen more pessimistic in the depths of the pandemic.
- Back to current conditions, company new orders saw some relative improvement as they increased from -19.5 (lowest since Apr 2023) to -6.9 although full-time employment saw a second consecutive decline (-7.2 in Apr after -7.5 in Mar for largest declines since Aug 2024).
- Importantly though for a Fed that is increasingly saying it will focus on inflation in event of a dual mandate trade-off, prices paid increased further to 46.5 (highest since Feb 2023) but there is clear difficultly at passing these higher costs on with prices received at -0.1 after 8.4 in March.
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CANADA PM CARNEY TO MEET GOVERNOR GENERAL AT NOON
- CANADA PM CARNEY TO MEET GOVERNOR GENERAL AT NOON
- CARNEY EXPECTED TO SEEK ELECTION
US TSYS: Available "Extraordinary Measures" Pick Up Slightly From Lows
Treasury has $163B of "extraordinary measures" remaining for authorities to use to fend off hitting the debt limit as of March 19, per the latest release of Treasury data. That's up from $86B on Mar 17 and a low of $34B on Feb 24.
- That's a little under half of the $377B in measures available to Treasury, with most of the amount remaining ($143B) coming from the so-called "G Fund".
- This headroom is in addition to $416B in cash left in the TGA, at last count.
- We haven't seen any changes recently to "x-dates" by when Treasury will run out of cash until the debt limit is lifted.
- Consensus still centers around late July/early August, but much will depend on April's major mid-month tax take. Treasury wrote to Congress last week that they would be able to provide an update on the x-date in the first half of May, after the conclusion of tax season.
USDCAD TECHS: Short-Term Outlook Remains Bullish
- RES 4: 1.4793 High Feb 3 and key resistance
- RES 3: 1.4700 Round number resistance
- RES 2: 1.4641 76.4% retracement of the Feb 3 - 14 bear leg
- RES 1: 1.4452/4543 High Mar 13 / 4 and a bull trigger
- PRICE: 1.4345 @ 16:27 GMT Mar 21
- SUP 1: 1.4242 Low Mar 6 and a key near-term support
- SUP 2: 1.4151/4107 Low Feb 14 / 50.0% of Sep 25 - Feb 3 bull run
- SUP 3: 1.4011 Low Dec 5 ‘24
- SUP 4: 1.3944 61.8% retracement of the Sep 25 ‘24 - Feb 3 bull cycle
USDCAD is trading closer to its recent lows. The bull cycle that started Feb 14 remains intact and moving average studies remain in a bull-mode position, highlighting a dominant uptrend. Note that the latest pullback has exposed a near-term key support at 1.4242, the Mar 6 low. Clearance of this level would undermine the bull theme and instead highlight potential for a test of 1.4151, the Feb 14 low and a bear trigger. The bull trigger is 1.4543, the Mar 4 high.
