EM LATAM CREDIT: Positioning Begins Ahead of Colombia 2026 Presidential Election

Minneapolis Fed President Kashkari (non-2025 FOMC voter but votes in 2026, centrist) doesn't provide much more clarity on his rate path view in a Q&A Tuesday. Recall that he said that there had been a higher bar to adjusting rates following the April 2 Liberation Day retaliatory tariff announcements - though post-April 9 tariff "pause"  his initial though was modestly less inflation impact but maintained that there was a high bar to cut rates. At this point he doesn't seem to have any particular guidance for his own preferred rate path, joining many of his FOMC colleagues on the sidelines waiting to see how tariffs play out.

• In Q&A Kashkari highlights once again the uncertainty in the inflation outlook facing the Fed amid tariffs, saying: "It's too soon to judge what's going to happen to the path of interest rates. But I will say this... there's  a very logical argument to be made that a tariff is a one time increase in prices...the challenge is we've had four years of high  inflation. And so...are we running the risk, and would the Fed run the risk, of allowing inflation expectations to get unanchored... if we all believe high inflation is now the new  normal, it becomes more likely to, in fact, be the new normal. And so we cannot allow inflation expectations to get unanchored. There's a lot of data that suggest near-term inflation expectations have increased quite a bit in response to this... so far, the evidence is not there that long run inflation expectations have moved very much. It's our job to make sure that that does not happen. And so, you know, we just don't know right now with confidence is this a one time effect on inflation or is it something longer term? Our job at the Fed is to make sure it is not something longer term."
• On tariff-related uncertainty, he highlights the downside hit to confidence: "The math of tariffs right now is quite large. I mean, one of the highest in 100 years. But the hit to confidence is also quite large. And so this is why I go back to, how long is this uncertain environment going to be maintained? I don't know, if there are quick resolutions on with our major trading partners, then maybe the uncertainty can be lifted quickly. But we'll just have to wait and see."
• He says the labor market remains healthy but again there  is uncertainty over the path ahead: "I have not seen evidence of widespread layoffs yet. I'm happy about that. But how long can this uncertainty be maintained before businesses actually start to pull back and feel like, no, we've got to start shedding workers. So I'm going to be paying very close attention to new unemployment claims to lay off announcements to see is the labor market softening materially. The labor market has softened relative to a year ago, relative to a year ago, relative to two years ago, but with a 4.2% unemployment rate, it's still overall, still a healthy labor market. But again, that data is now stale. And so what's going to be the case next week?  Next month, 3 or 6 months from now, if we don't get some of this uncertainty lifted?"

• RES 4: 149.28 High Apr 3    
• RES 3: 148.03 50-day EMA 
• RES 2: 145.25 20-day EMA
• RES 1: 142.25/143.28 High Apr 21 / 16   
• PRICE: 140.78 @ 16:18 BST Apr 22
• SUP 1: 139.79 1.382 proj of the Feb 12 - Mar 11 - 28 price swing
• SUP 2: 138.82 1.500 proj of the Feb 12 - Mar 11 - 28 price swing
• SUP 3: 138.07  LowJul 28 ‘23
• SUP 4: 137.85 1.618 proj of the Feb 12 - Mar 11 - 28 price swing

The trend condition in USDJPY remains bearish and this week’s fresh cycle lows reinforce this condition. The extension down confirms a resumption of the downtrend and maintains the price sequence of lower lows and lower highs. Note too that moving average studies are in a bear-mode position highlighting a dominant downtrend. Sights are on 139.79 next, a Fibonacci projection. Initial firm resistance to watch is the 20-day EMA, at 145.25.

• RES 4: 0.8800 Round number resistance      
• RES 3: 0.8781 2.236 proj of the Mar 3 - 11 - 28 price swing
• RES 2: 0.8768 High Nov 20 ‘23
• RES 1: 0.8624/0.8738 High Apr 21/ High Apr 11 and the bull trigger 
• PRICE: 0.8580 @ 16:17 BST Apr 22 
• SUP 1: 0.8520 20-day EMA 
• SUP 2: 0.8477 61.8% retracement of the Mar 28 - Apr 11 rally  
• SUP 3: 0.8442 50-day EMA  
• SUP 4: 0.8415 76.4% retracement of the Mar 28 - Apr 11 rally

The latest pullback in EURGBP appears corrective - for now. The retracement has allowed a recent overbought trend condition to unwind. Support to watch lies at 0.8520, the 20-day EMA. Below this level, support at the 50-day EMA is at 0.8442. The area between these two averages represents a key support zone. For bulls, a resumption of gains would refocus attention on 0.8738, the Apr 11 high and bull trigger.