STIR: Post-ISM Correction Stabilizes, NFP Increasingly In Focus
- The intraday swing higher in US rates since ISM manufacturing appears to have stabilized, with SOFR terminal implied yields some 12bp higher.
- Whilst the ISM mfg report was better than expected, there were still contractionary undertones throughout.
- Instead, the magnitude of the reaction was potentially helped by a reversal of month-end buying yesterday that helped build on sustained rates rallies through the week. The pre-ISM rally had been further boosted by jobless claims which included continuing claims pushing to a fresh cycle high.
- Fed Funds cumulative cuts from 4.33% effective: 2bp for next week, 16bp for Jun, 37.5bp Jul, 60bp Sep and 96bp Dec.
- SOFRU6 implied yield 3.00% (+6bp on the day). It had earlier today seen sub-2.9% for the lowest since September.
- Still to come today, earnings from Air BnB, Amazon and Apple after the close with potential spillover implications. Tomorrow’s nonfarm payrolls report of course also looms large (MNI preview here)
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LOOK AHEAD: Wednesday Data Calendar: ADP Private Employment, Tariff Announcement
Reminder, Chicago Fed President Austan Goolsbee is scheduled to appear on FOX News: Special Report with Bret Baier at 1800ET tonight.
- US Data/Speaker Calendar (prior, estimate)
- 02-Apr 0700 MBA Mortgage Applications (-2.0%, --)
- 02-Apr 0815 ADP Employment Change (77k, 120k)
- 02-Apr 1000 Factory Orders (1.7%, 0.5%)
- 02-Apr 1000 Durable Goods Orders (0.9%, 0.9%)
- 02-Apr 1000 Cap Goods Orders Nondef Ex Air (-0.3%, --)
- 02-Apr 1000 Cap Goods Ship Nondef Ex Air (0.9%, --)
- 02-Apr 1130 US Tsy $60B 17W bill auction
- 02-Apr 1500 WH reciprocal tariff annc from Rose Garden
- 02-Apr 1630 Fed Gov Kugler on inflation expectations (text, Q&A)
MNI EXCLUSIVE: ISM Mfg Chief On Sector Outlook Under Tariffs
MNI interviews ISM manufacturing chief on sector outlook amid tariffs -- On MNI Policy MainWire now, for more details please contact sales@marketnews.com
EURUSD TECHS: Trend Condition Remains Bullish
- RES 4: 1.1083 High Oct 2 2024
- RES 3: 1.1040 High Oct 4 2024
- RES 2: 1.0961 76.4% retracement of the Sep 25 ‘24 - Feb 3 bear leg
- RES 1: 1.0861/0955 High Mar 21 / 18 and the bull trigger
- PRICE: 1.0808 @ 15:50 BST Apr 1
- SUP 1: 1.0733 Low Mar 27 and a key short-term support
- SUP 2: 1.0656 50-day EMA and a short-term pivot level
- SUP 3: 1.0602 Low Mar 5
- SUP 4: 1.0548 50.0% retracement of the Feb 3 - Mar 18 bull run
The trend condition in EURUSD is bullish and recent weakness appears to have been a correction. MA studies are in a bull-mode position highlighting a dominant uptrend. 1.0733, the Mar 27 low, marks a key near-term support. A move through it would confirm a clear breach of the 20-day EMA and signal scope for a deeper correction towards the 50-day EMA at 1.0656. Key resistance and the bull trigger is 1.0955, the Mar 18 high.
