US: President Biden's Approval Rating Continues To Trend Upwards
Voter approval of US President Joe Biden's has reached its highest level since October 2021, according to Real Clear Politics.
- The RCP approval tracker shows Biden's approval at 44.5% with early survey data conducted since Biden's Ukraine trip showing a positive spike.
- Bettors now see Biden as clear favourite to take the Democrat nomination for 2024. According to Smarkets, Biden has a 64% implied probability of winning the nomination and no clear candidate is currently considered a credible challenger.
- Vice President Kamala Harris is Biden's closest potential rival with an 8% implied probability of taking the nomination.
Figure 1: President Biden Approval Rating (RealClearPolitics)
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US TSYS: Real Yields Drive As Breakevens Resist Downward Pressure
- The day’s rally in nominal Treasury yields (10Y -5bps) is carried fully in real yields (-6bps) with breakevens firming modestly (+1bp).
- Potential macro drivers for the day’s move in the breakeven were mixed, with the PMI showing an acceleration in prices paid but selling prices with the joint-slowest increase since Oct’20.
- The 10Y breakeven has twice struggled to push down to 2.1% in the past two months but is still relatively low compared to the past two years at 2.27%.
- Further material downward developments here are likely to require signs of continued supply chain improvements, with the NY Fed’s GSCPI significantly off prior highs but still showing disruption at more than 1 standard deviation from average.
10Y breakeven (white) and real yield (yellow)Source: Bloomberg
USDJPY TECHS: Bear Cycle Still In Play
- RES 4: 134.77/81 High Jan 6 / 23.6% Oct - Jan downleg
- RES 3: 134.28 50-day EMA
- RES 2: 132.87 High Jan 11
- RES 1: 130.98/58 20-day EMA / High Jan 18
- PRICE: 130.34 @ 15:42 GMT Jan 24
- SUP 1: 127.23 Low Jan 16 and the bear trigger
- SUP 2: 126.81 1.382 proj of the Oct 31 - Nov 15 - 21 price swing
- SUP 3: 126.36 Low May 24 and a key support
- SUP 4: 125.49 1.50 proj of the Oct 31 - Nov 15 - 21 price swing
USDJPY trend conditions remain bearish. The pair is trading below last week’s high of 131.58 and the 20-day EMA, at 130.98. Recent activity appears to be a bear flag formation, reinforcing the downtrend. A break lower would open 126.81, a Fibonacci projection - the bear trigger is 127.23, the Jan 16 low. On the upside, clearance of 131.58, the Jan 18 high, would be a bullish development and signal scope for a stronger correction.
US: Reps Central To Debt Limit Crisis - Most Conservative And Least Experienced
The Pew Research Center has released a report showing that members of the House Freedom Caucus (HFC) are amongst the most conservative lawmakers in the House of Representatives.
- Members of the HFC are at the center of a showdown with Democrats over raising the federal government debt ceiling with 20 or so HFC members granted considerable power by House Speaker Kevin McCarthy (R-CA) to unlock his bid to become speaker.
- Much of the political uncertainty around the debt ceiling standoff concerns how far conservative Republicans will be willing to push negotiations in order to extract concessions on spending.
- The report shows that not only are HFC Reps the most conservative, they are also amongst the least experienced in Congress with 71% of members serving six or fewer years in Congress.
- This ideological positioning and lack of congressional experience may increase the risk of miscalculation in negotiations.
Chart 1: Ideological Scores of House Representatives, Based on Roll Call Votes
Source: Pew Research Center
Chart 2: Freedom House Caucus Members, Years of Service
Source: Pew Research Center
